HRA Agenda 11-02-2005
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, November 2,2005 - 6;()0 p.m.
Bridge Room - Community Center
Commissioners:
Chair Darrin Lahr, Vice Chair Dan Frie, Steve Andrews, Brad Barger, and Bill
Fair.
Council Liaison:
Wayne Mayer.
Staff: Rick Wolfsteller, Ollie Koropchak, and Angela Shumann.
I . Call to Ordcr.
2. Consideration to approve the October 5, 2005 liRA minutes.
3. Consideration of adding or removing items ti'om the agenda.
4.
Consent Agenda.
A. Consideration to approve ratification of the Amendment and Second Amendment of
License Agreement between thc HRA, the City, and Rocky Mtn Group LLC.
B. Consideration to approve Release of Contract for Private Redevelopment between the
HRA and I3lue Chip Development Company.
5. Consideration to review proposal and approve hiring LJ-IB to commence preparation of a
redevelopment inspection report tt)r proposed Redevelopment 1'1 F District No. 1-37.
6. Consideration to review and accept:
A. Increase in fees by Elhers & Associates.
R. Revisions to the Preliminary Development Agreements
7. Consideration to authorize payment of HRA bills.
8. Consideration of HRA Executive Report.
9.
Committee Reports:
Marketing
Fiber Optic
10. Next HRA meeting - Wednesday, December 7,2005.
II. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, October 5th, 2005
50S Walnut Street - Bridge Room
Commissioners Present:
Steve Andrews, Bill Fair, Darrin Lahr, and Dan Frie
Commissioners Absent:
Brad Barger
Council Liaison Present:
Wayne Mayer
Staff Present:
Rick Wolf<;teller, Ollie Koropchak, and Angela Schumann.
I. Call to Order.
Chairman Lahr ealled the meeting to order at 6:00 PM and deelared a quorum.
2. Consideration to approve the September ih and September 261h, 2005 HRA
meeting minutes.
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MOTION BY COMMISSIONER FAIR TO APPROVE THE MINUTES OF
THE lIRA MEETING OF SEPTEMRER ih and September 261\ 2005.
MOTION SECONDED BY COMMISSIONER ANDREWS.
MOTION CARRIED.
3. Consideration of adding or removing items from the al!:enda.
Koropchak added as item Sa an update on the Landmark Square II project.
4. Consideration to hear a concept presentation for potential redevelopment of Block
35 and consideration to approve entering into a Preliminary Development
Agreement with APM.
Koropchak introduced Mike Van Heel of Allied Property Management) and
Steven Mosborg of SunTide Development. They are present representing a
possible Block 53 redevelopment. The development group has held several
meetings with City staff regarding proposed concepts. At this time, they are
interested in proceeding with a proposal.
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Koropchak stated that in that regard, the HRA could consider authorizing a
prel iminary agreement.
HRA Minutes 10/05/2005
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Michael Van Heel addressed the HRA, indicating that Allied Property owns the
Worktl)fee Building in Monticello, as well as other commercial property in the
metro area. Van Heel stated that with Muller Theater leaving, there was an
opportunity to reevaluate the sitefor redevelopment.
Steven Mosborg stated Allied controls 1/3 of the parking are and the Work Force
building. Mosborg got involved when the Muller Theater came up for sale. After
the first meeting with staff, it seemed to make more sense to involve the whole
block, especially in light on parking issues. Mosborg stated that they had several
concept plans drawn in order to work with the City on a suitable concept.
Mosborg noted the present conditions of the buildings on the block and noted that
tenants had outgrown current spaces. Mosborg referred to the plan ineluded in the
HRA packets and stated that they already have two interested tenants. Mosborg
noted that Jeff O'Neill has asked them to re-analyzc thc parking shown on the
plan as it appears short of the required parking. Mosborg stated that they have
met the Mayor who indicated that if they wanted to close River Strcet and build
on it, he would not object. However, Mosborg stated that thcy would rather do a
choke down the strect to eliminate the trafTic, and makc it more diHicult to use as
a go around.
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Fair asked if the project would be phased. Mosborg stated that because of
existing owners, there should not bc a need to phase. He statcd if they do phase,
there would be an '06 and '07 phase. Most likely, thc dcvclopment would all
happen at the samc time. Lahr asked about the purpose of the large housing
lobby. Mosborg replied that it is the community area for the condo area.
Mosborg stated they wanted to be proactive in their purchasing and they do have
willing scllers. I Ie indicated that SunTide has had purchase agreements
discussions with cveryone on the property owncr list provided to the fIRA. The
list represents the order SunTide prefers to purchase properties.
In tcrms of City commitment, Mosborg statcd that SunTide had provided the
HRA with a top line budget and an estimated project cost of 25 million. The total
valuation ycar-end was projected at $18-19 million. Mosborg stated that SunTidc
estimates it needs $6.4 million of TIF, amortized over a 25 ycar window. He
indicated that is what SunTide believes would be needed for a straight market
deal, without condemnation. L,ahr notcd that cooperative sellers will be key.
Mosborg commented that condemnation in Monticello has not been the procedure
of choice.
Mosborg referenced the Cedar Street garden center as a property that the City
may want to consider purchasing for parking, as it is a centralized location.
Mosborg stated that they will addrcss the parking issue. Lahr recommended
highly that they look into providing adequate parking, as it is always an issuc.
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I IRA Minutes 10/05/2005
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Mosborg stated that the next step is to take the steps as outlined in City timelines.
If SunTide can keep this process moving along, groundbreaking would be
sometime 1fom April to June.
Van lIeel inquired ifupon signing the preliminary developmcnt agreement, it
would trigger the use of consultants. Koropchak confirmed.
Koropchak stated that contingent on the II RA' s action, it is recommended that
SunTide representatives meet with the HRA's attorney and Ehlers. Koropchak
stated those two parties want to make sure the timing of acquisition meshes with
TTF requirement and relate concerns regarding relocation. Mosborg stated that he
would makc themselves available for that meeting.
Lahr asked ifthere are relocation issues. Mosborg stated that there are two pieces
to protect, willing sellers and month-to-month leases. The longest least is the
State. The second is Bremer Hank.
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Mayer asked about utilities, noting that River Street ineludes City utilities. If
SunTide builds over them, it becomes a liability. Mayer stated that there have
been discussions and concerns about thc River Street signal light. Mayer stated
that it seems that the I ight is the culprit of traffic backing up and there has been
Council conversation about eliminating the light. Mosborg stated that the market
may require the access points at River Street. Mayer indicated that Council would
be disappointed in the possibility of keeping it open.
Fair noted that previously, local residents did not want the light to go. Mosborg
asked if it would be a City or MnDOT decision. Fair stated MnDOT probably
wouldn't have an objection to it going. Koropchak noted the light does serve
Front Street traffic. Fair noted that while it may be a bad intersection, he doesn't
know if Council wants to fight the battle and lose the project. Mosborg stated thc
choke down could be the compromise that works. People will think twice about
River being a faster route.
Lahr asked what the Council's concern is, in terms of the benefit of closing River.
Mayer responded that that the congestion in that area would easc, if the lights
weren't there.
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Koropchak noted that she did call LHB, who will do the inspection for property
qualification. Their schedule for inspection would probably be mid-November
with a written report in January. Koropchak explained that the HRA hires the
inspection firm, but the developer pays for it. Mosborg stated that itcm was
relative to Van Hecl's comments. Mosborg stated thcy may want to mect with
LHB. Van I Ieel asked why the inspection was needed. Fair responded that it had
to do with the statutory responsibility, as the properties have to meet a test of
substandard to qualify so that the assistance can be granted. Lahr noted that there
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lIRA Minutes 10/05/2005
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arc not many firms who do the analysis, which is fi:mnulaic. Koropehak noted
that they do a thorough inspection with a coverage test.
Mosborg stated that it will require thc TIF money to work, so it is elear that we
have to do it.
Koropchak recommcnded moving forward with the preliminary agrcement, with a
few rcvisions and submission of the deposit.
MOTION BY COMMISSIONER ANDREWS TO ACCEPT THE
PRELIMINARY CONCEPT FOR REDEVELOPMENT OF BLOCK 53 AND
TO APPROVE ENTERING INTO THE PRELIMINARY DEVELOPMENT
AGREEMETN WITH APM.
MOTION SECONDED BY COMMISSIONER FAIR.
MUrtON CARRIED.
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Fair asked about how critical exposurc on Highway 25 is in tcrms of this project
and future projects. Moshorg statcd that Highway 25 cxposurc is important to
somc and not other. Mosborg stated that the anchor tenants would bc the State,
the drug storc and the bank. Fric asked whether they had considered a right turn
lanc due to the commutcr tra1Tic How. Koropchak noted that the interchange and
the extension of ill Street wi II al so case some of the traffi c in thc arca.
5. Consideration of approvc a resolution adopting thc modification to the
Redevelopment Plan for Central Monticello Redevelopment Proicct No. I and
establishmcnt of Redevelopment TIF District No. 1-35 and its Plan thereto.
Koropchak reported that the Planning Commission meeting had recommended
denial ofthc rczoning ofthc Ottcr Creek Industrial arca in a 5-0 vote. She
eXplained that a number of people had spokc in opposition to the rezoning at the
public hcaring. Fair notcd that the City itself was thc applicant and asked where it
goes from here. Fair asked ifthc liRA should develop a position.
Koropchak stated that her understanding is that thcre is no public hearing at the
Council. It will bc on the regular agenda. Whether the Mayor allows people to
comment, I do not know. She stated that whethcr the 11RA would like to make
comment is their decision.
Fair stated that Koropchak made some strong arguments on economic impact, and
stated that long-range he doesn't see the henefit of the proposed rezoning and use.
Fair asked other Commissioners how thcy would like to proceed. Maycr
encouraged the Commissioner to provide their opinion on the rezoning.
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BRA Minutes 10/05/2005
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Koropchak stated that for those that didn't see the meeting, her recommendation
was to dcny the request.
Lahr stated that his personal feeling is that they can find a different site, but in
that case, the City will be responsible to pay to get them out. In any case, Lahr
stated that using the industrial park land for that purpose is not a good long-term
decision. He noted the amount of proposed and existing residential use in the area
and notcd that once it is thcrc, it's not going to go anywhere. Lahr noted that the
city will grow up around it. I think we should pay the relocation costs and move
on.
Fair asked if A VR is doing their own property seareh. Mayer statcd that hc did
not believe so. Fair stated that after the City and A VR have settled, they can take
the cash, and put up the cement plant wherever they'd like.
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Mayer stated his concern is at what cost is the City willing to gamble if it does go
to court. Frie asked if there was a precedent set in other similar cases. Mayer
stated that it could be in the range of $5-1 0 mill ion. Lahr asked how far off that is
from what was budgeted for relocation. Mayer stated $3.4 million was budgeted.
Mayer c1arificd that it is Fair's opinion to fight the going concern claim. Fair
pointed out that A VR hasn't even tricd to find an alternate site and noted that thcy
arc not cvcn currcntly in thc City. Frie asked if there wcrc other locations
available in the township. He noted that although it would be nice to have a place
for them, the industrial park was intended for other purposes. There should be
othcr options.
Lahr noted that the City will always try to find a site. Mayer noted that thcy havc
gone through this process beforc. The trade-off is either the City will pay in cash
or in long terms changes to the City. Fair stated that anytime the City gets into
these large projects, there will be hiddcn costs, but the long-range vision is that
thc high quality industrial and business park is what we wantcd to accomplish.
Andrews stated that he has had a ditlicult timc with this. He noted that if it is
located in the City-owned industrial park, then at least there is an oppOliunity to
control how itis built. lIe stated that he has spoken with Rogcr Carlson about
this. Carlson cXplaincd that they can put the tanks undcrground, storage
underground, and that the sites are clean. Fair noted that those items don't impact
the 120 trucks in the area. Andrcws agrced, but noted there are ways to control
access points and ingress and egrcss.
Frie noted that it is a financial dccision. He stated that if it was going to be a 10
million dollar tax burdcn, it would be dinicult to justify. Fric indicated he would
need more information before giving a final opinion.
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Fair asked when the City would know about potential cost from a court
perspective. Mayer stated that thc rezoning is a way for the judgc to look at thc
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HRA Minutes 10/05/2005
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entire case, with the rezone contingent for specific purpose. Frie noted that from
a zoning standpoint, it is hard to justify this use. Mayer stated that details on an
offer package had been conveyed by City Attorney Tom Scott to A YR.
Koropehak noted that the City had met with A YR. It was a decision to take the
rezoning to the Planning Commission as part of this negotiation. Koropchak
stated her reco111mendation was made strictly from a land use decision.
Koropchak indicated that this area may well be the center of the City in the future.
She noted that this use is not consistent with any other proposed use under the
criteria and covenants. Koropchak also explained that the Planning Commission
has spent a year trying to deal with con11iets between industrial and residential or
commercial uses in Oakwood. This creates the same problem in a new area.
Lahr stated at the some point, the City has to step up and stick with the plan.
Monticello has to be confident that it is different. I think this is one of those
points, where they City identifies what it wants to be when it grows up.
Mayer noted that A VR has been the stickler since the interchange project started.
It was such a problem that the project almost didn't proceed. Mayer stated that he
appreciated the comments of the Commissioners and noted that it would be a
tough decision.
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Lahr asked about action of a recommendation on this matter. Koropchak stated it
is up to the HRA to take a position. Mayer noted that the question was asked of
the IDC, who had decided not to give a formal recommendation. He
recommended that those with strong opinions should voice them to the Council.
FAIR MADE A MOTION TO EXPRESS TO THE COUNCIL THAT TilE
PROPOSED REZONING OF A PORTION OF TIIE OTTER CREEK
INDUSTRIAL PARK DOES NOT COMPLY WITH THE LONG RANGE
PLANS OF TilE CITY AND TO RECOMMEND TO TilE COUNCIL DENY
THE REQUEST.
MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED 2-
1, WITH COMMISSIONER ANDREWS IN DISSENT AND COMMISSION
FRIE ABSTAINING.
hie explained that he would like to see the City find alternatives. lie stated that
without more information, it is ditlicult to take a position. .
Koropchak noted that Barger had conveyed that he is not in favor of the rezoning.
6. Consideration to authorize payment of lIRA bills.
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Fair asked if the relocation of the dirt stockpile in Otter Creek came in under
estimate. Koropchak confirmed.
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lIRA Minutcs 10/05/2005
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MOTION BY COMMISSIONER FAIR TO AUTHORIZE PAYMENT Of HRA
BILLS.
MOTION SECONDED BY COMMISSIONER fRIE.
MOTION CARRIED.
7. Consideration of the Executive Direetor's Report.
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a. Landmark Square: Koropchak reported that she had spoken with Brad
Johnson, who had asked her to speak on their behalf on the development
agrecmcnt. Fluth wanted to know about the timing of thc rclease of thc $20,000
the agreement authorized f(J[ acquiring the Koppy garage. Koropchak stated that
thc contract was written that the developer gets the money when the
improvements arc done for thc projcct. Thc dcfinition of "complete" is when the
houses are gone and the o11ice is complete and parking lot is in. In addition,
Koppy's garage demolition and surfacing also has to bc completc. Koropchak
explained that whilc thc dcveloper could gct a ccrtificate of occupancy on the
11,000 building, the contract does not authorize release of the $20,000 until
cverything is done and there is a certificate of completion. fluth would like the
$20,000 once thc garagc is demolishcd and parking improvements are in.
Lahr askcd ifthcrc is a risk to thc lIRA. Fair statcd that the matter is really just
timing. Koropchak noted that the HRA would also then be agreeable to the fact
that the parking improvements for Landmark Square I are enhanced without
complction of Landmark Square II.
MOTION BY COMMISSION FAIR '1'0 AMEND THE CONTRACT
APROYING DISBURSEMENT Of THE $20,000 UPON COMPLETION AND
EVIDENCE OF PAYMENT FOR ACQUISITION, DEMOLITION AND
PUBLIC IMPROVEMENTS ASSOCIATED WITH THE KOPPY GARAGE.
MOTION SECONDED BY COMMISSIONER FlUE.
MOTION CARRIED, 4-0.
In the balance of hcr report, Koropchak stated that Dahlheimer's has footings in.
She also noted that the first transf'(mnation home loan is expected to close soon.
Koropchak stated that the fiber optics task forcc was preparing a request for
proposal. Shc notcd the letter from thc Statc Auditor relative to questions on the
2003/2004 TlF reports.
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BRA Minutes 101OS/200S
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8. Committee Reports:
None.
9. Other Business
Koropchak rcported that she had prepared a list of qualified leads for a targeted
postcard Illailing rcgarding thc business park.
10. Adiournment
MOTION BY COMMISSIONER FAIR TO ADJOURN AT 7:30 PM.
MOTION SECONDED BY COMMISSIONER LAI-IR.
MOTION CARRIED UNANIMOUSL Y.
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Secretary
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4A.
HRA Agenda - 11/02/05
Consideration to ratify the Amendment and Second Amendment to License Aereement
between the HRA. the City. and Rockv Mtn Group LLC.
A. Reference and backeround:
The HRA is asked to ratify the Amendment to License Agreement between the HRA, the City,
and Rocky Mtn Group LLC which was executed by all parties on October 14,2005.
The HRA, the City, and Rocky Mtn Group LLC (the "redeveloper") entered into a License
Agreement on September 26, 2005, allowing the redeveloper early entry to Lot 1, Block 1,
Otter Creek Crossing 1 sl Addition for the purpose of final grading and installation of footings.
It was anticipated the closing date would occur on or before October 14,2005, conveying the
Otter Creek Crossing property from the City to the HRA to the redeveloper.
Based on the title commitment, there are a number of title issues which need to be resolved and
the redeveloper's attorney and the HRA Attorney are working to resolve these issues. The plat
was recorded on September 28,2005.
The Amendment to the License Agreement simply extends the termination date ofthe
Agreement from October 14 to October 31, 2005 and allows construction of structural walls
and roofing of the minimum improvements as described within the Contract. This is more or
less a housekeeping item and eliminates default by the redeveloper.
Second Amendment.
The I IRA Attorney just informed me of the need for a Second Amendment as the title issues
are not resolved. Dahlheimer's are conducting a survey of their 8.6 acres of land in hopes most
of the title objections don't apply to their property. Therefore for the need of the Second
Amendment. They anticipate the survey and title issues to be resolved and to close November
7,2005, the proposed "termination date." I asked the liRA Attorney to researeh the title
insuranee policy prepared for the closing of the 35 acres from Chadwick to the City and why
these items weren't taken care of and to clear them up prior to the next land transaction. One
of the purpose of the city owned-land was to provide the applicant with a smooth purchase and
conveyance process.
B. Alternative Action:
1. A motion to approve ratifying the Amendment and Second Amendment to License
Agreement between the HRA, the City, and Rocky Mtn Group LLC
HRA Agenda - 11/02/05
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2.
A motion to deny approval ratifying the Amendment and Second Amendment to
License Agreement between the HRA, the City, and Rocky Mtn Group LLC.
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A motion to table any action.
c.
Recommendation.
The City Administrator and Economic Development Director recommend alternative no. I as
this is a housekeeping item and allows the redeveloper to proceed with construction without
default of the Contract.
D. Supportinl! Data:
Copy of the Amendment and Second Amendment to License Agreement.
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AMENDMENT TO LICENSE AGREEMENT
This Amendment to License Agreement entered into \~ day of October, 2005, by and
between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
MONTICELLO, a public body corporate and politic under the laws of Minnesota (the "Authority"),
the City of Monticello, a Minnesota municipal corporation (the "City") and ROCKY MTN
GROUP, LLC, a Milmesota limited liability company ("Redeveloper").
RECITALS
WHEREAS, the Authority and Redeveloper entered into a Purchase and Redevelopment
Contract dated as of September 2, 2005 (the "Contract"), under which the Authority agreed to
convey to Redeveloper cC11ain property described in the Contract as the Redevelopment Property;
and
WHEREAS, Authority, City and Developer entered into a License Agreement dated as of
September 26, 2005 (the "Licensc Agreement"), under which Redeveloper is grantcd the right to
enter upon thc Redevelopment Property prior to transfer of title of the Redevelopment Property to
Redeveloper in order to commence site improvements on that property; and
WHEREAS, due to title issues recently discovered in that certain Commitment for Title
Insurance File No. 25669 First Supplemental issued by Commercial Partners Title, LLC, the closing
for the Redevelopment Property will need to be dclayed; and
WHEREAS, the Redeveloper will need to extend the termination date of October 14, 2005
to October 31, 2005 as stated in Section 10 of the License Agreement and the City and Authority
agree to the extension thereof; and
WHEREAS, the Redeveloper wishes to extend the purpose of the early entry for final
grading and installation of footings to installation of foundation, structural walls and roofing.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and othcr
good and valuable consideration, the parties hereto agree that the Amendment to License
Agreement is hereby amended as follows:
1. Extension of Time. The termination date under Section 10(b) of the License
Agreement is extended to October 31, 2005; and the Closing date under the Contract, previously
extended under Section 11 of the License Agreement, is extended to October 31, 2005.
2. Puroose of Earl v Entrv. The purposes ofthe early entry described in Section 1 of the
License Agreement are extended to include construction of structural walIs and roofing of the.
Minimum Improvements described in .the Contract.
3. No Other Changes. Except as specifically modified herein, the License Agreement
shalI remain unchanged and in fulI force and effect.
NKE-269(,20v I
MN190.121
;[30
IN WITNESS WHEREOF the undersigned have executed this instrument the day and date .
first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR J'HE CITY
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OF MONTICELLO \
By (j~. ~cI\~~-D~
Its Executive Director .
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CITY OF MONTICELLO
By av JkLj
a.
. ' rCu1:.;
Its City Adminis ator
NKE-269620v I
MN190-121
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CONSENT OF INTERMEDIARY
The undersigned, as assignee of Rocky Mtn Group, LLC under the Replacement Property
Assignment Agreement dated September 6, 2005, consents to the foregoing Amendment License
Agreement among the City of Monticello, the Housing and Redevelopment Authority in and for the
City of Monticello and Rocky Mtn Group, LLC.
Dated:
ROCKY MTN EXCHANGE HOLDING COMPANY 25254, LLC
By
Its Chief Manager
NKE-269620vl
MN190-121
S E. - .~ \...\
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4B.
HRA Agenda - 11/02/05
Consideration to approve Release of Contract for Private Redevelopment between the
HRA and Blue Chip Development.
A. Reference and back~round:
Mr. Kevin Weers, First National Bank of Elk River, called to inquirc about the recorded
Contract for Private Redevelopment by and betwccn the Housing and Redcvclopmcnt
Authority in and flX City of Monticcllo and Blue Chip Developmcnt Company dated October
5, 1998, filed October 19, 1998 as Doc. No. 658926. The propcrty described as the east
161.00 feet of Lot 5, I3\ock 3, Oakwood Industrial Park was dcvcloped for tenant, B&B
Metal Stamping, resulting in job crcation and construction of a 12,000 sq ft facility. The
$32,000 pay-as-you-go TIF reimbursement is paid to the developer, Bluc Chip, was fiJr public
redevelopment costs. The Contract was recorded because thc rcimbursement goes to the
developer and the facility is leased; thereforc, the restrictions of use is tied to the maturity date.
Thc maturity datc of the Contract is February 1,2009. The job creation has bccn satisfied.
On Octobcr 24,2005, the City Council approved thc final plat (re-plat) ofthc area. Blue
Chip plans to construct a 25,000 sq ft manufacturing facility to the rcar lot described as Lot 3,
Block 1, Chip Blue Development Addition. With the re-plat, Lot 2 consist of the B&B Metal
Stamp building and Lot 1 will consist of the Vector '1'001 15,000 sq. ft. building.
Thc dcvclopcr, Bluc Chip, has requested and will pay f'(Jr the HRA Attorncy to prepare the
appropriate document. The BRA will be release the Contract from that portion of the legal
description associated with Lot 3 only and the Contract and its restrictions of use remain with
I,ot 2 as follows.
"The redeveloper agrees that until thc maturity date to operate the minimum
improvements at least 85%) of square footage for manufacturing, warehousing, or any
combination of such activities..........."
B. Alternative Action:
1 . A motion to approve the
2. A motion to deny
3. A motion to table.
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HRA Agenda - 11/02/05
c.
Recommendation:
The City Administrator and Economic Development Director recommendation alternative no. I
to encourage development of a 25,000 sq ft facility and clear a title for purpose of construction
financing.
D. Supportin~ Data:
Plat approved October 24, 200S. Copy of document prepared by Attorney Bubul distributed
at meeting.
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.
.
.
HRA Agenda - 11/02/05
5.
Consideration to review proposal and approve hirinu: LHB to commence preparation of
a redevelooment inspection report for proposed Redevelooment TIF District No. 1-37.
A. Reference and back2:round:
At the October 5, 2005 HRA meeting, the commissioners heard a presentation by Steve
Mosberg, Suntide Commercial Realty, for potential redevelopment of Block 53, downtown
Monticello. Steve was representing Chuck and Mike Van Heel of Allied Properties &
Management LLC (APM). "J'he project consist of approximately 63,120 sq ft of leaseable
retail and office space and 36 units of owneH)ccupied condos. Estimated total project cost
including acquisition and demolition was $25,398,615. Projected gap was $6,429,204.
Anticipated commencement April 2006.
The HRA accepted the preliminary concept and approved entering into the Preliminary
Development Agreement with APM.
Because of the concerns of the relocation costs and the amount cif the gap, a meeting bctween
the developers, Ehlers, Bubul, and staff was held on October 12,2005. Givcn the expertise of
Bubul, an estimated cost of $300,000 for tenant relocation costs was added to the project.
Ehlers indicated because oUhe current market value of the existing parcels, the estimated tax
increment over 25 years was approximately $2 miJlion leaving a gap of $4 million. The
potential of a $250,000-$300,000 State Redevelopment Grant, the addition of more housing,
and perhaps a higher assessed value by the Assessor may help to narrow the gap. It was again
acknowledged, the need of an inspection to qualify the parcels as a redevelopment district, to
execute the Preliminary Agreement and submit the deposit of $7,500. A proposal was
req uested.
The proposal from LHB is attached and was forwarded to Mike Van Heel. They are currently
re-evaluating the project. They did proceed with purchase of the Times property.
Since they have not executed the Preliminary Development Agreement, submitted the deposit
fee, nor agreed to pay for the LHB proposal; the proposal is presented for your review only.
B. Alternative Action:
1. A motion to approve the hiring of LITR for TIF District Block 53 Inspection Services.
2. A motion to not hire LHB for TIF District Block 53 Inspection Services.
HRA Agenda - t t /02/05
.
~
-'.
A motion of no action due to a lack of response from the redeveloper, APM.
C. Recommendation:
Should we not hear from the redeveloper, the recommendation is alternative no. 3.
D. Supportin2: Data:
TIP Cashflows and proposal from LHB.
.
.
2
.
.
.
9/23/2005
. EHLERS
CITY OF MONTiCELLO. The Times Redevelopment
CondolRetail . TIF District
I!I@_EW TJ.F:CASHF~OWAssuMP!fION$! ., "j
Oistrict Type New Redevelopment District
District Numb@ir
Infl13tion Rate. Every Year 0,0000%
Pay-As-You-Go Interest Rate 6.5000%
Nole l$!;iued Date (Present Value Date) 01.Aug~06
Local Tax Rate" Maximum 122.1100% Pay 2005
Fiscal Disparities Election (A-inside or B-oulside) N/A
Year Dis1rict was cl!Irti11@d Pay 2006
Assume$ First T"x Increment For District 2008
Year District was modified N/A
Development located jn modified area No
Assumes First Tax Increment for Project 2008
Years ofT ax Increment 26
Assumes Last YSClr or Tax Increment 2033
Fiscal Disparities Ratio
Fiscal Disparities Metro VV'ide Tax Rate
Local Tax Rat~ - Currenl
State 'vVide Property Tax Rate (used for total taxes)
Market Value Tax Rate (used for tOlallaxeS)
0.0000%
0.0000%
122.1100% Pay 2005
51.1210% Pay 2005
0.05440"':' Pay 2005
Commereiallndustrial Class Rate
First 150,000
Over 150,000
Rental Class ~ate
Residental Class Rate
First 500,000
1.50%-2.00%
1.50%
2,00%
1.25%
1,00%-1.25%,
100%
Page 1 of 2
fiiii','i, ....." Asli0lilll!llllll
Cia!;;!;; Rate After
Propl:!r1y Land Building lotal Class 8a~e Alter Conversion Dati:!
Map ID PID O"":'_~~!.n.'_. Market Value Market Value Market Value ~_._._~~.!~. 'n__ T~,~,S:~p~~,!!y.___~~nversion lax Capacity Pa~~,=--
1 155-010-053010 43,600- 43,600 1,50%-2.00% 654 1.00'/,., ,25% 436 2006
2 155-010-053020 84,700 B4}DO 1.50%-2.00(>/0 1,271 1.00%-1.25% 847 2006
3 155-010-053040 Mull"rPr"p 43,600 323,700 367,300 1 ,501.';,,-2,00% 6,596 1.50%-2.00% 6,596 2006
4 1 55-0 1 0-053050 Mull.., P">f> 88,100 320,200 408,300 1 ,500A,-2,000,/,\ 7,416 1,50%-2.00% 1,416 2006
5 155-010-053070 !';IIV"" K.PP,."I' 86,600 239,900 326.000 1,50%-7,,00%.. 6.180 1.00'Y,,-1,25% 3,265 2006
6 155-010-053090 ':;t:'v,,~ k_J" Plr;lP 43,700 43.700 1.50%.2,00%, 656 1,00%-125% 437 7,006
7 155.010-053100 IjQlk~r 43,700 14,900 58,600 1,50%-2,00% 879 100%-125% 588 2006
8 155.010-053110 Sm~h 57,200 57,200 1,50%-2.00% 858 1,000;","1,25% 572 2006
9 155-010-053111 46,200 121,300 167,500 1.50%-2.00(1" 2,600 1.00%-1.25% 1,675 2006
10 155-010-053112 !)I'T"~" 49.200 153,200 202.400 1 ,50%,200% 3,298 1,00%-1,25% 2,024 ;2006
-,_!~- 155.010,053130 261,700 699,500 961.200 1,50%-2.00% 18.474 1,00%.1.25% 9,612 2006
Totals 2,721,000 . ..48,~1~.__. -33,"i66-'
,Phase
1
Clilss
Rati:!
1,00%
1,00%,-200%
1.00%
1.50%-2.00~~b
TOTAL
Market
Valu~
3,564,000
:2,367,000
3,564,000
2,367,000
_.__'"~!~~.~,_~~,~_! 1,862,000
U..
Condo
Retail
Condo
Retail
Sq. Ft.1Units
18
31,560
18
31,550
Sq. Ft.1Units
198,000
75
198,000
75
Note:
Proj~!::t
Tax Capacity
35,640
46,590
35,640
46,590
164.460
Yl:!a.r
Constructed
2006
2006
2007
2007
Date
Payable
200B
2008
2009
2009
1, TiF nm J~~ume~ 50% of th~ ptoja-L:t coMtru>:ttld by January 2, :WOG fOr paytlble 2007 Clrid th~ tertl~ind~t' i~ t.on~t"i.it:"H.>d by Ji'Hu.iary 2. 2007 for pJY.jjbi~~ 10013.
U.e
Tolat
Tax
C.. "cit
71,280
9:J,1ao
1~4,4.60
TAXCAlCUw\TIONS
State-wide
Prop~rty
~~..~~
0.51121
0,51121
0,5t! 2L"
Local
.T:alles
87.040
11~,!81..._
.1~.O,~~ .__ .._
Local Fiscal
Tax Dil!ipal'itie:s
-1,,_Cffi-i~--l.l'_x~~~~i.!Y.-
,~t=}~~~=_=t::=-%------
Local
Tax
Rate
"--Tfino-
1.22110
1.22110
Housing
R.etail
,QI.~...._
Note:
1. Montic{:llo do~.f, not P,Ay f:isc"d Disp.lf'itl!:!$
Prepared by Ehl~t~ & A550c;:i..h:~1 Int:.
Preliminary: For Discussion Purposes ONL V
Mal'k~t
Value Total
Tax~'!S Taxe'!;
3,874 90,914
2,573 193,890
6,447 254,S04
Times Red~v~IQPl'rll!!l1t
9/23/2005 ~.age 2 of 2
. EHLERS
.
CITY OF MONTICELLO. THE TIMES REDEVELOPMENT
Base Project Fiscal Ca ptufed Semi~Annual State Admin. Semi-Annual Serni-Annual PAYMENT DATE
PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor at Net Tax Present PERIOD ENDING
~~:..~q,~~.c;~.E.~.. Reduction ..<;:'~~.,,~~.crement q.;,~6"/o 1 O,OO'&,,~_ Increment Va.I..~,e Yrs. Mth, Yr,
0.0 02-01 2006 33.466 :13.466 0,0 08-01 2006
0,0 08-01 2006 33.466 33,466 0 Present Value Dato - 8-01-06 0 0 0 0 0,0 02-01 2007
0.0 02-01 2007 33.466 33.466 0 0 0 0 0 0 0 0,0 08-01 2007
0 0 0 0 0 0 0
0 48,764 29,773 (107) (2,967) 26,699 23.493
0 48,7G4 29,773 (107) (2,967) 26,699 46,246
1.0 02.01 2009 33.466 164,460 0 130,994 79,978 (288) (7,969) 71,721 105,445 15 08-01 2009
1.5 08-01 2009 33,466 164.460 0 1300994 79,978 (288) (7,969) 71,721 162,779 2.0 02-01 2010
2,0 02-01 2010 33,466 164,460 0 130,994 79,978 (288) (7,969) 71,721 218,309 25 08-01 1010
15 08-01 2010 33.466 164,460 0 130,994 79,978 (288) (7.969) 71.721 272,092 3.0 02-01 2011
3,0 02.01 2011 33,466 164,460 0 130,994 79,978 (288) (7,969) 71,721 324,181 3,5 08-01 2Dll
3.5 08.01 2011 33,466 164.460 0 130,994 79,978 (288) (7,969) 71,721 374,631 4.0 02-01 2D12
4,0 02-01 2012 33.466 164,460 0 130,994 79,978 (288) (7,969) 71,721 423.492 4,5 06.01 2012
4,5 DB-Ol 2012 33,466 164.460 0 130,994 79,978 (288) (7,969) 71,721 47Q,816 5,0 02.01 2013
5,0 02-01 2013 33.466 164.460 0 130,994 7~,978 (266) (7,969) 71,721 516,650 5.5 08-01 2013
5.5 08-01 2013 33.466 164.460 0 130,994 79,978 (288) (7,969) 71}21 561,041 6,0 02-Dl 2014
60 02-01 2014 33,468 164,460 0 130,994 79,978 (288) (7.969) 71,721 604,035 65 08-01 2014
8,5 08-01 2014 3~,466 164.460 D 130,994 79,978 (288) (7,969) 71,721 645,676 7,0 02-01 2015
7,0 02-01 2015 33.466 164.460 0 130,994 79,978 (288) (7,969) 71,721 686,006 7,5 08-01 2015
7,5 08-01 2015 33.466 164,460 0 130,994 79,978 (288) (7,969) 71,721 725,066 8.0 0,-01 2016
8.0 02-01 2016 33.466 164,460 0 130,994 79,978 (288) (7,969) 71,771 762,897 8.5 08-01 2016
6,5 08-01 ,016 33,466 164.460 0 130,994 79,978 (<68) (7,969) 71,721 799,537 9.0 02-01 2017
9.0 02-01 2017 33,466 164,460 0 130,994 79,97B (286) (7,969) 71,721 835,024 9.5 08-01 2017
9,5 08-01 2017 33,466 164,460 0 130,994 79,976 (288) (7,969) 71,721 869,394 10,0 02-01 2018
100 02-01 2018 33,460 164,460 0 130,994 79,978 (28B) (7,969) 71,721 902,682 10,fI 08-01 2018
10,5 08-01 2018 33,4fSS 164,460 0 130,994 79,97B (2BB) (7,969) 71,7<1 934,922 11.0 02-01 2019
11.0 02-01 2018 33,466 164.460 D 130,994 79,978 (288) (7,969) 71,721 966,148 11.6 08-01 ,D19
115 08-01 2019 33,466 164.460 0 130,994 79.978 (288) (7.969) 71,721 996.390 12,0 02-01 ,020
12,0 02.01 2020 33.466 164.460 D 130,994 79,978 (288) (7,969) 71.721 1,025,681 12.5 08-01 2020
125 08-01 2020 33.466 164.460 0 130,994 79,978 (288) (7,969) 71.721 1,054,049 13.0 02-01 2D<1
13.0 D2-01 2021 33.466 164.460 0 130,994 79,978 (288) (7,969) 71,721 1,081,525 13.5 06-01 2021
13,5 08-01 2021 33.466 164.460 0 130,994 79,978 (286) (7,969) 71.721 1,108,138 14,0 02-01 2022
14,0 02-01 ,022 33.466 164,460 0 130,994 79,97B (288) (7,969) 71,721 1,133,909 14.5 08-01 2022
14.5 08-01 202, 33,466 164,460 D 130,994 79,978 (288) (7,969) 71,721 1,158,870 15,D 02-01 2023
15,0 02-01 2023 33.466 164.460 0 130,994 79,978 (288) (7,969) 71,721 1,183,047 15,5 OB-Ol 2023
15.5 08-01 2023 33,466 164,460 0 130,994 79,978 (<88) (7,969) 71,711 1,206.462 150 02-01 2024
16,0 02-01 20:14 33,46S lB4,460 0 130,994 79,978 (28B) (7,969) 71,7<1 1,229,140 16.5 08-01 1D7.4
16.5 0801 2024 33.466 164.460 0 130,994 79,978 (288) (7,969) 71,721 1,:251,104 17,0 D,-D1 2025
. 17,0 02-01 2025 33.466 164.460 0 130,994 79.978 (288) (7,969) 71.721 1,272.3 n 17,5 OB-Ol 2025
17.5 08-01 2025 33.466 1~4.460 0 130,994 19,978 (288) (7,969) 71,721 1,292,980 18.0 02-01 2026
18.0 07-01 2026 33.466 164.460 0 130,994 79,978 (288) (7,969) 71,721 1,312,935 18.5 08-01 2026
1e.5 08-01 2026 33,466 164.<60 0 130,994 79,978 (2B8) (7,969) 71,721 1,332.262 19,0 02-01 2027
19.0 02-01 2027 33,466 164,460 0 130,994 79,9"18 (288) (7,969) 71}21 U50,980 19,5 08-01 2027
195 08-01 2077 33.466 164,460 0 130,994 79,978 (288) (7,969) 71,721 1,369,109 20,0 02-01 ,D,8
200 02-01 207.8 33,466 164,460 0 130,994 79,978 (288) (7,969) 71.721 1,386,668 20.5 08-01 ,028
20.5 08-01 2028 33.466 164.460 0 130,994 79,978 (288) (7,969) 71,721 1,403,673 21.0 02,01 2029
210 02-01 2029 33.466 164.460 D 130,994 79,978 (288) ((969) 71,721 1.420,144 215 08,01 2029
21.5 OB.Ol 2029 33.466 164.460 0 130,994 79,978 (288) (7,959) 71,721 l.436,096 22.0 D,-OI 2030
22.0 02.01 2030 33.466 164.460 0 130,994 79,978 (288) (7,969) 71.721 1.451,b46 22,5 08-01 2030
22.5 08-01 2030 33.466 154,460 0 130,994 79,978 (286) (7,969) '/1,721 1.466,509 no 02-01 2031
23,0 02-01 2031 33.466 164.460 0 130,994 79,978 (<8B) (7.969) 71,721 1.481,002 23.5 08-01 2031
235 08-01 2031 33,466 164,460 0 130,994 79,978 (288) (7,969) 71,721 1,495,038 24,0 02-01 Z032
24,0 02-01 2032 33.465 164,460 0 130,994 79,978 (288) (7,969) 71,721 1,508,633 24,5 08..01 20:32
24,5 08.01 2032 33.466 164.460 0 130,994 79,978 (288) (7,969) 71.721 1,521,800 25,0 02-01 2033
25.0 02-01 2033 33.466 164,460 0 130,994 '19,978 (2BB) (7,969) 71,721 1,534,552 25.5 08-01 2033
_J55 08-Q,I.__~ ~.3,4{j6 ,164_,,~, 0 130.994 7~,97B (28.8)_ (7,969) 71,7<1 1,546,903 ,60 02-01 .". u 2034
---.,. ._-',. Totals ..._-,.. 4.05B,4~5 (14.6101_ j404,365) 3.639,~69 ..,..-.-.---
p!.e!i~nt Va:Ii.Je...q~!~_ ^ 8-01-06 .,. U81.0,!!,3 (6.210) _ J171,B76) 1,.546.903
No1~:
1. SW.t'" Auditor r"ym~~1 is. b~;~~~:;i O~ 1st haff: P~y 2005 actual ;;.nd rrli(i j(ttrease ov~rtN!'I~ of district
2. t\SSur"rI(!'!:, fir.'5t hijif of d(llve!(Jprnent i5 C(Jr'lsl'f'u:ct!..~d in 2006, tJ:!i!i<..~5.!:'0(. in 2.007 <:IF'lCi fir~t increment is p<ltd in 2008
,', ASSUI'rlf.!S !;,~cond ~l<tlf of tiEJveloplYlerllls L;Dn~~~rucH:>d in 2n07, llS5IJSsod irl 2i)OB j'lnd first jnc;rl~rllent j!;,. paid ft~ 200fJ.
4, Amouf'lt of incmlTIf:nt INHi vary rJf!renuic~9 ilpOI1 market \r;}I~Jj~. t.ax rates, clar,~ r,Up'!,>, constrtJcti<.'lI) ~chequl~ ~nd infliltioll or; !1\i,rket v~lue.
5. InflMiQr'l I:!!i tax r.llt~s cannof bE clipWr~d.. TAX RATES COUl..n rlr:CUNE
6, TIF !;lces l':ot ti3.ptl,Jr~ !jit,W~ wide property ti'J;;>..(~s or m:;lrk~t V<ilue ~roperty t~x..es.
7, IF INFl.ATlONARY TIF lS HLCf;IVED IN 20GJ. l'HE", FINAL INCHf:MfNTWH..L Df 2!1/33,
~ "11:/"\:l1IclIl i~ L11..I:.!l1.!!.!.!!
Tj\I.IIIII'u"crt~' Ta\~.~
Il'.~s 'stall' T",
Ic.~~ Mark....t V IIII1C 'f :1\.
Ic~.~ b:i.~lill~ lll:\l'.~
AIIIIII;IJ l<l.\ 111(1-1'1111111 filllllH:inC
~., 'WIWR"IIALYSIS
25",9U,1
-~7,(i.l~
-(~ ,-1-17
,_iII,lIt,:; E~limalt.
l:'il),4):"l7 lc.~.~ IIlIY admin. ft,t~
Current Mal'k~1 V;.tluc - Est
N~w M~(kd Value - Est
Difference
F-'r~~t::ni Value of Tax InC:l'er'r'1~nt
Dltl~l~rH::1J
V.:.llJ~ lJk~ly to Occur \l\lithout Tax 11\(:I~m~I1II'; Less Than
L,'U'I,()OO
---22",,89~,OOO
9,141,000
1,7B1,OG3
7.359,947
7,359,947
N, \Minnsota\Mol)II(;~II\l\ Times Redt:!velnp\ Time,; Redeveluprrll;~rl\. xis
.
Prepared bV I:hhm; & A!I.!IQcjat~, Inc.
Preliminary: FDf OISC:Llnion Purposes ONLY
Ti mea RE!d~v~loplT'J(lnt
.
.
.
250 Third A venue NOJ1h, Suite 450
Minneapolis, Minnesota 55401
612.338.2029
Fax 612.338.2088
www.LHBcorp.com
October 21,2005
Ollie Koropchak
Economic Development Director
City of Monticello
505 Walnut Avcnue, Suite J
Monticello, MN 55362
PROPOSAL FOR TlF DISTRICT BLOCK 53 INSPECTION SERVICES
Thank you for the opportunity to sublnit a proposal for the City of Monticello Block 53 TlF
District inspection services. LHB is a full-service architecture and engineering firm with
145 employees in our Minneapolis and Duluth offices.
Our Community Design studio has extensive experience working with local governments on
their planning, design, architectural and engineering needs. Having been personally
involved as a City Council President, I understand how cities function and the importance of
maintaining the support of the city council and community throughout the process.
PREVIOUS EXPERIENCE
LHB has significant experience with a variety of inspection and facility assessment projects,
including the analysis of over 30 TIF districts in the past four years. Examples include:
City of Columbia Heights TIF inspection services
City of S1. Paul 1'117 inspection services
City of S1. Anthony Village, NW Quadrant TlF inspection services
City of S1. Louis Park TIF District inspection services
City of Mound TIF District"] -2" inspection services
City of Osseo TIF inspection services
City ofNcw RichnlOnd. WI TIF inspection services
Minncsota State Colleges and Universities system facility assessments
State of Minnesota facility assessments
Property Condition assessments for the S1. Paul Department of Planning and Economic
Development (Franklin/Emerald Neighborhood)
Condition survey of every property along the 1-394 corridor for the Minnesota Department
of Transportation, prior to and during the construction of 1-394
ADA compliance assessments for the State of Minnesota (82 buildings in ] 992)
Duluth_ MN
Minneapolis_ MN
Proposal for Monticello Block 53 TIF District Inspection Services
Page 2 of6
October 21, 2005
METHODOLOGY
.
A. Survey the proposed TIF district to determine if it meets the "Coverage
Test":
I. To meet the coverage test, parcels consisting of 70 percent of the area of the
district must be "occupied" by buildings, streets, utilities, or paved or gravel
parking lots.
2. ^ parcel is not considered "occupied" unless at Icast 15% of its total area
contains improvements.
B. Make the following attempts to inspect the interior of each building in the
district:
I. Obtain propelty owner's consent for inspection.
2. Document all property conditions relative to Minncsota Statutes Section
469.174 Subdivision 10.
.
C. Determine replacement cost for each building:
1. Replacement cost is the cost of constructing a new structure of the same
square footage and type on the site.
2. A base cost will be calculated by establishing the building class, typc and
construction qual ity.
3. Identify amenities, which increase the value of the building over thc
standard construction qual ity level.
4. Revicw building permits for each parcel.
5. The base cost and cost of amenities will be totaled to determine the
replacement cost fix the propel1y.
D. Determine the existing condition of each building:
1. "Structurally substandard shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities and facilities,
light and ventilation, fire protection including adequate egress, layout and
condition of interior partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to justify substantial
renovation or clearance."
E. Determine Code Deficiencies in each building:
1. Determine technical conditions, which are not In compliance with current
building code applicable to new buildings.
2. Determine costs to correct identified deficiencies.
3. Compare cost of deficiency corrections to replacement value of bui Id ing.
4. A building is not structurally substandard if it is in compliance with building
code applicable to new buildings or could be modified to satisfy the building
code at a cost of less than 15 percent ofreplacel1lent cost.
.
Proposal for Monticello Block 53 TIF District Inspection Services
Paoe3of6
'"'
October 21, 2005
.
F. Prepare a final report outlining findings:
1. Prepare a tabulated spreadsheet of the entire proposed district properties
conditions.
2. Prepare a written narrative analysis of the redevelopment district describing
why the property within thc district does or does not meet the criteria as
"structurally substandard" as established in Minnesota Statutes Section
469.174, subdivision 10.
3. Deliver final reports to City staff.
ASSUMPTIONS
Preliminary boundaries of the prospective district include eleven (11) parcels that will be
analyzcd for the coverage test. If the coverage test is met, nine (9) buildings will require an
intcrior inspection.
.
The City of Monticello will provide the following:
. A list of building permits issued for the parcels in the Jastthree years.
. A Icttcr to the property owners authorizing and explaining the inspections.
. Othcr documents as may be required to assess thc condition ofthe buildings and
determine coverage tests, including maps and GIS information with spccific
parccl data.
. A parcel map of the area to be inspcctcd.
. A list of all parccls including owner, current known business or resident nanle
and address.
COST AND FEE STRUCTURE
We propose to work on an hourly basis with the following key staff:
Project Principal, Michael Fischer (TIF analysis)
Project Managcr/ Arch itect/lnspector, Jerry Putnam
Project Administrator (Property owner contacts, docllmentation)
Project Planner coordinating GIS information and mapping
$l72/hour
$110/hour
$61/hour
$99/hour
We will work on an hourly basis with a not-to-exceed fee budget of $12,000 plus
rcimbursable expenses for the inspection of the 9 structures and a full repOli outlining the
findings for the TIF district.
SCHEDULE
We currently have an opening in our schedule to start work immediately. If you are unable
to start within one week, we should be able to bcgin work by November 15, 2005.
Assuming full cooperation of the property owners and the City, we will completc the final
report within 45 days ofthc start date.
.
Proposal for Monticello Block 53 TIF District Inspection Services
Page 4 of6
October 2 I, 2005
.
TERMS
We propose using an AlA Document B727 (Standard Form of Agreement Between Owner
and Architect for Special Services). The contract will include "limit of liability" language
(equal to our fee or $10,000 maximum, whichever is greater). In addition, the contract will
contain language negotiated with the city indicating that LHB and the City, acting through
the City's legal representative, will, to the fullest reasonable extent, cooperate and coordinate
effclIis in preparing responses to any third party challenges to the inspections.
TEAM CREDENTIALS
.
Michael A. Fischer, AlA - Project Principal/TIF Analyst
Michael has nineteen years of architectural experience as project principal, project
manager, project designer and project architect on municipal planning, educational,
commercial and governmental projects. He is a Vice President at LHB and currently
leads the Community Design Group in LHB's Minneapolis office. Michael completed a
two-year Bush Fellowship at the Massachusetts Institute of Technology in 1999, earning
Masters Degrees in City Planning and Real Estate Development. Michael has served on
over 35 committees, boards and community task forces, including a term as City Council
President and Chair of the Duluth/Superior Metropolitan Planning organization. He is
currently a Planning Commissioner in Edina, Minnesota. He was one of four architects in
the country to receive the National "Young Architects Citation" ii-om the American
Institute of Architects in 1997.
Jerry A. Putnam, AlA, FCSI, CCS - Project ManagerlInspector
Jerry is a senior architect in LHB's Minneapolis office with twenty-five years of
experience in all phases of the architectural process, from pre~design through construction
administration, including specialty consulting in investigations for buildings, building
condition surveys, TIF inspections, code reviews, estimating and specification writing.
Jerry is an active member in the Construction Specification Institute (CSI). He has been
recognized as a Fellow of CSI for his dedication and leadership in the construction
industry. In addition to being past president of the largest CSI chapter in the United
States, he serves on many local, regional and national committees, and has given
presentations at many specification writing classes and workshops.
Dennis Swartz, CSI - Inspector
Dennis has over 34 years of experience as a project architect and specifier, working for
clients throughout the United States and around the World. He is an active member of the
Construction Specifications Institute (CS1) and is the former Treasurer of the
Minneapolis-St. Paul chapter.
.
Todd Koneczny, AlA - Project Manager/Inspector
Todd has twenty-one years of design and construction experience in a wide variety of
building projects for municipal, institutional, healthcare and commercial clients. His
responsibilities often include project management, architectural design, construction
document preparation and construction administration. His seventeen years of design
Proposal for Monticello Block 53 TIF District Inspection Services
Page 5 of6
October 21, 2005
.
experience and four years of construction management experience has gIven him the
ability to understand all aspects of building systems and components.
Bruce Chalupsky, ASLA - GIS/Coverage Analysis
Bruce has more than ten years of experience as a landscape architect/planner.
During this time, he has specialized on site master planning for public and private
clients. Bruce has also pursued specialization in Geographic Information Services
(GIS) and is proficient in the administration of community data and the production of
maps for a variety of needs.
REFERENCES
Stephen ./. Bubul
Kennedy & Graven
612/337-9300
Mary L. Ippel
Briggs and Morgan
651/223-6620
NEXT STEP
.
Upon acceptance of this proposal, we will draft an AlA Owner/Architect agreement for your
review.
Thank you for the opportunity to submit a proposal for your project. Please contact me at
(612) 752-6920 if you have any questions.
LHB INC.
~~
MICHAEL A. FISCI'IER, ALA
DIRECTOR, COMMUNITY DESIGN GROUP
c: T.JK/MAF/JAP
L\MARKETlNG\Proposul Lctters\2005\TlF Inspections\Monticcllo TIF District Block 53 IO-II-05.doc
.
.
.
.
HRA Agenda - 11/02/05
6.
Consideration to review and accept:
A. Increase in fees bv Ehlers & Associates.
Attached is thc memo horn Mark Ruff noting the proposcd hourly fee increase and rangc of
fees for establishment of TIF Districts, etc. This proposal is before the HRA for two purposcs:
1. Review and accept proposed increasc in fecs as presentcd by Ehlers & Associates. 2. As
information in its relationship to HRA deposits and the J I RA budget.
1. A motion to accept the fee incrcase as proposed by Ehlers & Associatcs.
2. A motion to authorize rcsearch fee schedulcs of other financial consultants.
3. A motion to table any action.
B. Revisions to the Preliminary Development Al!reements.
As you recall, I rcquested the HRA Attorney update thc HRA's Preliminary Developmcnt
Agrecments. The normal agreemcnt is used f()f TIF projects other than projects within the
Monticello Business Center. The new agreement for use within the Monticello Business Center
was prcpared to cover up-front development costs incurrcd by the HRA. Example: The BRA
authorizes commenccment of thc platting proccss associated with the conveyance of property.
The required dcposit is also largcr.
This item is bcfore the HRA commissioners for the purpose of information and to acccpt thc
revised documcnts.
I. A motion to accept thc two rcvised Preliminary Development Agreements.
2. A motion to recommend changcs to either of the Agreemcnts.
3. A motion to table any action.
.
.
.
o
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. .
EHLERS
& ASSOCIATES INC
To:
Ollie Koropchak, City o[Monticello
Mark Ruff
October 12, 2005
From:
Date:
Su~ject: Fees
Our firm appreciates the opportunity to work with the City of Monticello and the Monticello
HRA. I appreciate the professional challenges of redevelopment and new growth that your
city presents on a regular basis.
As you are aware, our fIrm has not raised its hourly fees and fees for TIF districts for the
HRA fix several years. I recall that since we started working with the City in 1995, we have
raised our fees only once. Currently we are at $125 per hour. Almost all of the other clients
I serve are at hourly rates of $175 to $185 per hour. In addition, new requirements forTI F
districts have recently been passed in Minnesota regarding disclosure of fIscal implications
which will complicate TIP plans after the end 01'2005.
To avoid these large increases in rates in the future, I would propose that we raise our
hourly fees to $150 per hour and then increase $5 per hour annually for the next four
calendar years. This is still below our market rate for other clients, but Monticello is one of
our more active clients and I sincerely appreciate the relationship we have developed with
the City and HRA over the past decade.
Attached is a chart with our standard fees forTI F districts. Please call with any questions.
LEADERS IN PUBLIC FINANCE
1\
3060 Centre Pointe Drive
Roseville, MN 55113-1105
Phone: 651-697-8505 Fax: 651-697-8555
mark@ehlers-inc.com
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Page 1 of 1
Ollie Koropchak
It. ~ ~
.
From: Bubul, Stephen J, [sbubul@Kennedy-Graven,com]
Sent: Friday, October 07,2005 1:20 PM
To: Ollie Koropchak
Cc: Ingram, Martha N,
Subject: Preliminary Agreements
Attachments: Form Preliminary Developmennt Agreement.doc; Form Prelliminary Development Agreement
Monticello Business Center,doc
Attached are the following:
1. The form Preliminary Development Agreement for your normal TIF developments. I have updated
language in a couple of places, and left dates and dollar amounts blank You can use this as the
template for future agreements
2_ The form Preliminary Development Agreement for future projects in the Monticello Business Center,
This is the form that we started with in negotiations with Dahlheimer, with a few revisions. To
summarize, the Agreement provides as follows:
· The agreement has an initial term and an extended term If the Developer wants to extend
the term, it must pay an option payment, which will become non-refundable if no contract is
entered into and the property is never sold_ (We removed this from the Dahlheimer
transaction),
.
· The Developer must deposit $10,000 upon signing If costs exceed that amount during the
term of the PDA, Developer must pay the additional amounts, If the PDA is terminated, the
HRA will return any amounts on deposit that exceed costs incurred by the HRA. Costs
incurred include platting costs, and a cost has been incurred if a contract for those costs was
entered into before the date of termination. Therefore, if the HRA begins the platting process
by hiring an engineer, the Developer will be responsible for all those costs if the PDA is
terminated_ Further, if the initial term was extended, the Developer will forfeit the option fee
described above (In effect, the option fee for extending the PDA serves the same function
as a non-refundable deposit.)
Let me know if you have questions.
Stephen Bubul
Kennedy & Graven
470 U.S_ Bank Plaza
Minneapolis, MN 55402
612-337 -9228
.
10/13/2005
.
.
.
Form
October 7, 2005
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
PRELIMINARY DEVELOPMENT AGREEMENT
'fl-IIS AGREEMENT, dated this _ day of , 20_ by and between the
lIousing and Redevelopment Authority in and for the City of Monticello, Minnesota, a public body
corporate and politic under the laws of Minnesota ("Authority") and
("Developer"):
WITNESSETH:
WHEREAS, the Authority desires to promote development of certain property within the
City of Monticello, which property is legally described in Exhibit A attached hereto ("Property");
and
WHEREAS, the Developer has submitted a preliminary proposal (the "Proposal") for
development of the Property (the "Development"), which proposal is attached hereto as Exhibit B;
and
WHEREAS, the Developer has requested the Authority to explore the use of certain public
assistance to assist with the Development; and
WHEREAS, the Authority has determined that it is in the Authority's best interest that the
Developer be designated sole developer of the Property during the term of this Agreement; and
WHEREAS, the Authority and the Developer are willing and desirous to undertake the
Development if (i) a satisfactory agreement can be reached regarding the Authority's commitment
for public costs necessary for the Development; (ii) satisfactory mortgage and equity financing, or
adequate cash resources for the Development can be secured by the Developer; and (iii) the
economic feasibility and soundness of the Development and other necessary preconditions have
been determined to the satisfaction of the parties; and
WHEREAS, the Authority is willing to evaluate the Development and work toward all
necessary agreements with the Developer if the Developer agrees to reimburse the Authority for its
costs if the Development is abandoned or necessary agreements are not reached under the temlS of
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set forth herein, the parties agree as follows:
I. Negotiations between the parties shall proceed in an attempt to formulate a definitive
development contract ("Contract") based on the following:
S.lU-26<J35Xv I
MNI90-]OI
.
.
.
(a) the Developer's Proposal, which shows the scope of the proposed
Development in its latest form as of the date of this Agreement, together with any changes
or modifications required by the Authority;
(b) a mutually satisfactory Contract to be negotiated and agreed upon 111
accordance with negotiations contemplated by this Agreement;
(c) such documentation regarding economic feasibility of the Project as the
Authority may wish to undertake during the term of this Agreement; and
(d) other temlS and conditions of this Agreement.
2. It is the intention of the parties that this Agreement: (a) documents the present
understanding and commitments of the parties; and (b) will lead to negotiation and execution of a
mutually satisfactory Contract f()r the Development prior to the temlination date of this Agreement.
The Contract (together with any other agreements entered into between the parties hereto
contemporaneously therewith) when executed, will supersede all obligations of the parties
hereunder.
3. During the teml of this Agreement, the Developer shall:
(a) Submit to the Authority a design proposal to be approved by the Authority
showing the location, size, and nature of the proposed Development, including floor layouts,
renderings, elevations, and other graphic or written explanations of the Development. The
design proposal shall be accompanied by a proposed schedule for the starting and
completion of all phases of Developmcnt.
(b) Submit an over-all cost estimate for the design and construction of the
Development.
(c) Submit a time schedule for all phases of the Development.
(d) Undeliake and obtain such other preliminary economic feasibility studies,
income and expense projections, and such other economic infonnation as the Developer
may desire to fllliher confirm the economic feasibility and soundness of the Development.
(e) Submit to the Authority the Developer's financing plan showing that the
proposed Development is financially feasible.
(1) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Development.
4. During the tcrm of this Agreement, the Authority agrees to:
(a) Commence the process necessary to undcrtakc such public assistance as is
necessary pursuant to the terms of the Proposal.
SJ B-26'J35Xv I
MN]<JO-IOI
.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Development.
(c) Estimate the Authority's level and mcthod of financial participation, if any,
in the Development and develop a financial plan for the Authority's participation.
5.
subject to:
It is expressly understood that execution and implementation of the Contract shall be
(a) A determination by the Authority in its sole discretion that its undel1akings
are feasible based on (i) the projected tax increment revenues and any other revenues
designated by the Authority; (ii) the purposes and objectives of any tax incrcment,
development, or other plan created or proposed Jar the purpose of providing financial
assistancc for the Devclopment; (iii) a determination by the Authority that tax incrcment
financing or other public financial assistance is rcasonably necessary in order to make the
Development feasible; and (iv) the best interests of the Authority.
(b) A detcnnination by thc Developer that the Development is fcasible and in
the best interests of the Developer.
.
6. This Agreement is effective from the datc hereof through ~_ ,200 . After
such date, neither party shall have any obligation hereunder except as exprcssly set forth to the
contrary herein.
7. Thc Developer shall be solely responsible for all costs incurred by the Developer. In
addition, the Developer shall reimburse the Authority for Administrative Costs, as hereafter defined.
For the purposes of this Agrcement, the term "Administrative Costs" means out of pocket costs
incurred by the Authority together with staff costs of the Authority, all attributable to or incurred in
connection with thc negotiation and prcparation of this Agreement, the Contract, and other
documcnts and agreements in connection with the Development, including without limitation the
cost of financial advisors, attorneys, tax incremcnt building inspection consultants, and planning and
environmental consultants.
In ordcr to sccure payment of the Administrative Costs, the Developer shall deliver to the
Authority cash or a ccrtiJied check in the amount of $ , such delivery to occur upon
execution of this Agreement. If at anyone or more timcs during the term of this Agrecment, the
Authority dctemlincs that Administrativc Costs will excccd $ and that additional
security is rcquired, the Authority shall notify the Developer of thc anlount of such additional
security. Within ten calendar days of rcceipt of this noticc, the Dcveloper shall delivcr to the
Authority the required additional security. The Authority will utilize the funds delivered by the
Developer to payor reimburse itsclffor Administrative Costs. Upon tcmlination of this Agreement,
the Authority will return to the Dcveloper the funds paid by the Developer to the Authority pursuant
to this Section 7, less an amount equal to the Administrative Costs.
.
'fhis Scction 7 shall survivc termination of this Agrcement and shall be binding on the
Developer regardless of the cnforccability of any other provision of this Agreement.
SIB.26'13'i8vl
MNI90-IOI
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8. This Agreement may be terminated upon 5 days written notice by the Authority to
the Developer if:
(a) an essential precondition to the execution of a contract cannot be met; or
(b) if: in the respective sole discretion of the Authority or the Developer, an
impasse has been reached in the negotiation or implementation of any material term or
condition of this Agreement or the Contract; or
(c) The Authority detennines that its costs in performing under this Agreement
will exceed the anlount deposited under Section 7 and the Developer does not deliver
additional security to the Authority pursuant to Section 7 of this Agreement.
If the Authority tenninates the Agreement under this Section 8, the Developer shall remain
liable to the Authority under Sections 6 and 7 of this Agreement for costs incurred by the Authority
through thc date of temlination.
9.
Agreement.
The Developer is designated as sole developer of the Property during the term of this
10. In the event that the Developer, its heirs, successors or assigns, fail to comply with
any of the provisions of this Agreement, the Authority may proceed to enforce this Agreement by
appropriate legal or equitable proceedings, or other similar proceedings, and the Developer, its
heirs, successors or assigns, agrce to pay all costs of such enforcement, including rcasonablc
attorneys' fees.
11. If any p0l1ion of this Agreement is held invalid by a court of competent jurisdiction,
such decision shall not affect the validity of any remaining portion ofthe Agreement.
12. In the event any covenant contained in this Agreement should he breached by one
party and subsequcntly waived hy another party, such waiver shall be limited to the particular
breach so waived and shall not be deem cd to waive any other concurrent, previous or subsequent
breach.
13. Notice or demand or other communication between or among the parties shall be
sufficiently given if sent hy mail, postage prepaid, return receipt requested or delivered personally:
(a) As to the Authority: Housing and Redevelopment Authority
in and for the City of Monticello
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Attn: Executive Director
(b) As to the Developer: ~.,.
SJR-26935Hvl
MN 190-101
.
.
.
14. This Agreement may be executed simultaneously in any number of counterparts, aU
of which shall constitute one and the same instmment.
15. This Agreement shall be governed by and constmed in accordance with the laws of
the state of Milmesota. Any disputes, controversies, or e1aims arising out of this Agreement shall be
heard in the state or federal courts of Minnesota, and all pmiies to this Agreement waive any
objection to the jurisdiction of these courts, whether based on convenience or otherwise.
16. The Developer hereby agrees to protect, defend and hold the Authority and its
officers, elected and appointed officials, employees, administrators, commissioners, agents, and
representatives harmless from and indemnified against any and all loss, cost, fines, charges,
damage and expenses, including, without limitation, reasonable attorneys fees, consultant and
expert witness fees, and travel associated therewith, due to claims or demands of any kind
whatsoever arising out of (i) the devclopment, marketing, sale or leasing of all or any part of the
Property, including, without limitation, any claims for any lien imposed by law for services,
labor or materials furnished to or for the benefit of the Property, or (ii) any claim by the state of
Minnesota or the Minnesota Pollution Control Agency or any other person pertaining to the
violation of any permits, orders, decrees or demands made by said persons or with regard to the
presence of any pollutant, contaminant or hazardous waste on the Property; and (iii) or by reason
of the execution of this Agreement or the performance of this Agreement. The Developer, and
the Developer's successors or assigns, agree to protect, defend and save the Authority, and its
officers, agents, and employees, harmless from all such claims, demands, damages, and causes of
action and the costs, disbursements, and expenses of defending the same, including but not
limited to, attorneys fees, consulting engineering services, and other technical, administrative or
professional assistance. This indemnity shall be continuing and shall survive the performance,
termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a
limitation of or waiver by the Authority of any immunities, defenses, or other limitations on
liability to which the Authority is entitled by law, including but not limited to the maximum
monetary limits on liability established by Minnesota Statutes, Chapter 466.
17. The Developer, for itseH: its attorneys, agents, employees, former employees,
insurers, heirs, administrators, representatives, successors, and assigns, hereby releases and forever
discharges the Authority, and its attorneys, agents, representatives, employees, former employees,
insurers, heirs, executors and assigns of and ti-om any and all past, present or future claims,
demands, obligations, actions or causes of action, at law or in equity, whether arising by statute,
common law or otherwise, and for all claims for damages, of whatever kind or nature, and for all
claims J{)r attorneys' fees, and costs and expenses, including but not limited to all claims of any kind
arising out of the negotiation, cxecution, or performm1ce of this Agreemcnt betwecn the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
S.IU-269J58v I
MNI9()-IOI
.
.
.
IN WITNESS WHEREOF, thc Authority has caused this Agreement to be duly executed in
its name and behalf and its seal to be duly affixed hereto and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
DEVELOPER
By
Its:
By
Its:
S.lI3-2()'J358v I
MNI90-IOI
.
.
.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF MONTICELLO, MlNNESOTA
By
Its Chair
By
Its Executive Director
SJ8-26935Xvl
MN190-101
Form
. October 7,2005
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
PRELIMINARY DEVELOPMENT AGREEMENT
(Monticello Business Center)
TI-HS AGREEMENT, dated this _ day of , 20_ by and between the
Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, a public body
corporate and politic under the laws of Minnesota ("Authority") and
("Developer"):
WITNESSETH:
WHEREAS, the Authority or the City of Monticello ("City") owns certain property within
the City of Monticello, which property is legally described in Exhibit A attached hereto
("Property"); and
WHEREAS, the Developer has submitted a preliminary proposal (the "Proposal") for the
acquisition and development ofthe Property (the "Development"), which proposal is attached hereto
as Exhibit B; and
.
WHEREAS, the Developer has requested the Authority to explore the use of certain public
assistance to assist with the Dcvelopment; and
WHEREAS, the Authority has determined that it is in the Authority's best interest that the
Developer be designated sole developer of the Property during the term of this Agreement; and
WHEREAS, the Authority and the Developer are willing and desirous to undertake the
Development if (i) a satisfactory agreement can be reached regarding the Authority's commitment
for public costs necessary for the Development; (ii) satisfactory mortgage and equity financing, or
adequate cash resources for the Development can be secured by the Developer; and (iii) the
economic feasibility and soundness of the Development and other necessary preconditions have
been dctennined to the satisfaction of the parties; and
WHEREAS, the Authority is willing to evaluate the Development and work toward all
necessary agreements with the Developer if the Developer agrees to make the nonrefundable
deposit described herein, which is intended, in pmi, to reimburse the Authority for its costs if the
Development is abandoned by Developer or necessary agreements arc not reached under the tenns
of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set f()rth herein, the parties agree as follows:
.
1. Negotiations hetween the parties shall procced in an attempt to formulate a definitive
purchase and development contract ("Contract") based on the following:
.
.
.
(a) the Developer's Proposal, which shows the scope of the proposed
Development in its latest form as of the date of this Agreement, together with any changes
or modifications required by the Authority;
(b) a mutually satisfactory Contract to be negotiated and agreed upon 111
accordance with negotiations contemplated by this Agreement;
(c) such documentation regarding economic fcasibiJity of the Project as the
Authority may wish to undertake during the term of this Agreement; and
(d) other terms and conditions of this Agreement.
? It is the intention of the parties that this Agreement: (a) docLUnents the present
underst-:mding and commitments of the pmiies; and (b) will lead to negotiation and execution of a
mutually satisfactory Contract for the Development prior to the termination date of this Agreement.
The Contract (together with any other agreements entered into between the parties hereto
contemporaneously therewith) when executed, will supersede all obligations of the pmiies
hereunder.
3. During the term of this Agreement, the Developer shall:
(a) Submit to the Authority a design proposal to be approved by the Authority
showing the location, size, and nature of the proposed Development, including floor layouts,
renderings, elevations, and other graphic or written explanations of the Development. The
design proposal shall be accompanied by a proposed schedule for the starting and
completion of all phases of Development.
(b) Submit an over-all cost estimate for the design and construetion of the
Development.
(c) Submit a time schedule for all phases of the Development.
(d) Undertake and obtain sueh other preliminary economic fcasibility studies,
income and expense projections, and such other eeonomic infonnation as the Developer
may desire to further confinn the economie feasibility and soundness of the Development.
(c) Submit to the Authority the Developer's financing plan showing that the
proposed Development is financially feasible, and, to the extent Developer seeks public
financial assistance in any form (including reduced land cost, waiver of tees, and tax
increment financing), evidence that such assistance is reasonably necessary to make the
Development financially feasible.
(f) Furnish satisfactory, financial data to the Authority evidencing the
Developer's ability to undertake the Development.
(g) Cooperate with the Authority and City 111 replatting of the Propeliy as
described in Section 4.
SJB-200X95v2
MN190-41
2
.
4.
During the term of this Agreement, the Authority agrees to:
(a) Conunence the process necessary to undeliake such public assistance as is
necessary pursuant to the terms of the Proposal, including without limitation
commencement of actions necessary to create a tax increment financing district that includes
the Property.
(b) Proceed to seek all necessary information with regard to the anticipated
public costs associated with the Development.
(c) Estimate the Authority's level and method of financial participation, if any,
in the Development and develop a financial plan f(Jr the Authority's participation.
.
(d) Either acquire the Property and grant to the Developer, or cause the City to
grant to the Developer, a right of access to the Propcrty for purposes of environmental
and soil testing. Dcveloper agrees to indemnify, save harmless, and defend the Authority
and City , their officers, and employees, from and against any and all elaims, actions,
damages, liability and expense in connection with personal injury and/or damage to the
Property arising from or out of any occurrence in, upon or at the Propeliy caused by the
act or omission of thc Developer in connection with Developer's entry on the Property.
Further, Developer shall not permit any mechanics', materialmens' or other liens to stand
against the Property or any part thereof for work or matcrials furnished to Developer in
connection with the right of entry granted pursumlt to this Agreement and Developer
agrees to indemnify, defend and hold harmless the Authority and City from and against
the same.
(e) Commence replatting of the Property, or cause the City to commence such
replatting, in order to create the parcel described on Exhibit A.
5. It is expressly understood that execution of the Contract shall be subject to:
(a) A determination by the Authority in its sole discretion that its undertakings
are feasible based on (i) the projected tax increment revenues and any other revenues
designated by the Authority (to the extent requested by Developer); (ii) the purposes and
objectives of any tax increment, development, or other plan created or proposed for the
purpose of providing financial assistance for the Development, if any, including the
determination that such assistance is reasonably necessary in order to make the
Development possible; (iii) the best interests of the Authority.
(b) A determination by the Developer that the Development is feasible and in
the best intcrests of the Developer.
.
6. This Agreement is effective from the date hereof through ,20 (the "Initial
Term"); provided that the term of the Agreement may be extended through , 20_ (the
"Extended Term") if Developer exercises the option described in Section 8 hereof. After expiration
of the Jnitial Teml without action by Developer under Section 8, or upon expiration of the Extended
Teml if Developer exercises its rights under Section g, ncither party shall have any obligation
SJR-200895v2
MN I ()1)-4!
...,
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hereunder except as expressly set forth to the contrary herein.
.
7. The Developer shall be solely responsible for all costs incurred by the Developer. In
addition, the Developer shall reimburse the Authority for Administrative Costs, as hereafter defined.
For the purposes of this Agreement, the term "Administrative Costs" means out of pocket costs
incurred by the Authority and City together with staff costs of the Authority and City, all
attributable to or incurred in connection with the negotiation and preparation of this Agreemcnt, thc
Contract, and other documents and agreements in connection with the Development, including
without limitation all costs in cOlmection with replatting of the Property and the cost of financial
advisors, attorneys, and planning and environmental consultants.
.
In order to secure payment of the Administrative Costs, the Developer shall deliver to the
Authority cash or a certified chcek in the amount of $10,000, such delivery to occur upon execution
of this Agreement. If at anyone or more times during the tenn of this Agreement, the Authority
determines that Administrative Costs will exceed $10,000 and that additional security is required,
the Authority shall notify the Developer of the anlount of such additional security. Within ten
calendar days of receipt of this notice, the Developer shall deliver to the Authority the required
additional security. The Authority will utilize the funds delivered by thc Developer to payor
reimburse itself for Administrative Costs. Upon ternlination of this Agreement, the Authority will
return to the Developer the funds paid by the Developer to thc Authority pursuant to this Section 7,
less an amount equal to the Administrative Costs incurred by the Authority through the datc of
notice oftennination. For the purposes of this paragraph, Administrativc Costs are considered to
he incurrcd if they have been paid, relate to services perform cd, or are payable under a contract
entered into, on or hefore the datc of the notice of termination.
This Section 7 shall survive tennination of this Agrccment and shall be binding on the
Developer regardless of the enforceability of any other provision of this Agreement.
8. (a) The parties agree and understand that the final Contract is expected to provide
for conveyance of all or a portion of thc Property from the Authority to the Developer or its
assigns, under terms agreed upon in the Contract. The parties currently anticipate that the
Property will be conveyed for a purchase price to be dctcrmined and subject to satisfaction of
contingencies specified in the Contract. As noted in Section I 0 hereof~ the Authority may not
sell, or negotiate for the sale of, any portion of the Property to any other person or entity during
the term of this Agreement. As consideration for such exclusive rights, if Developer wishes to
extend the Initial Term of this Agreement, the Developer agrees to pay to the Authority an option
payment of $ (the "Option Payment") Llpon or before expiration of the Initial Term. If
Developer makes such timely payment, the term of the Agreement is automatically extended
through the Extended Term specified in Section 6.
.
(b) If a Contract is executed within the Extended Term, and any portion of the
Property is conveyed to the Developer in accordance with its terms, a pro rata portion of the
Option Payment shaJI be applied against the purchase price of the first portion of the Property so
conveyed. The term "pro rata portion" means a percentage based on the area of the portion of
the Property first conveyed as a share of the total square footage of the property owned by the
Authority. The balance of Option Paymcnt shall be applied against the purchase price of
subsequent portions of the Property on the same basis.
SJR-200895v2
MN I '-)0-41
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(c) If for any reason a Contract is not negotiated and executed within the Extended
Term or any mutually approved extension thereof, or if this Agreement is terminated pursuant to
Section 9 hereof (other than due to breach by the Authority), or if the Contract is terminated
pursuant to its terms for any reason (other than due to breach by the Authority) before closing on
conveyance of any portion of the Property the Developer, then the Authority shall retain the
Option Payment. The Developer shall have no rights or interest in any interest earnings on the
Option Payment or in the amount retained by the Authority under this Section. The substantial
terms of this Section shall he incorporated in any Contract entered pursuant to this Agreement.
9 This Agreement may be tenninated upon 5 days written notice by a party to the
other party if:
(a) if~ in the respectivc sole discretion of the Authority or the Developer, an
impasse has been reached in thc negotiation or implementation of any material term or
condition of this Agreement or the Contract; or
(b) the Authority detennincs that its costs in performing under this Agreement
well exceed $10,000 cmd the Dcveloper does not deliver additional security to the Authority
pursuant to Section 7; or
(c) a party fails to perfonn any of it's obligations under this Agreement.
If either party terminates the Agreement under this Section 9, the Developer shall remain
liahle to the Authority to the extent provided under Sections 7 and 8 or this Agreement.
10. During the term of this Agreement, the Authority agrees that it will not negotiate
or contract with any other party coneerning thc sale or development of the Property. The
Developcr shall not assign or transfer its rights under this Agrecment in full or in part, or enter
into any subcontracts to perform any of its obligations hereunder, without the prior written
consent of the Authority.
I 1. In the event that the Developer, its heirs, successors or assigns, fail to comply with
any of the provisions of this Agreement, the Authority may proceed to cnforce this Agreemcnt by
appropriate legal or equitable proceedings, or other similar proceedings, and the Developer, its
heirs, successors or assigns, agree to pay all costs of such enf()rcement, including reasonable
attorneys' fees.
12. If any portion of this Agreement is hcld invalid by a cOUl1 of competent jurisdiction,
such dccision shall not affect the validity of any remaining portion of the Agreement.
13. In the event any covenant contained in this Agreement should be breached hy one
party and subscquently waived by another party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent
breach.
14.
Notice or demand or other communication bctween or among thc pm1ies shall be
SJH-200895v2
MN 190-41
5
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.
.
sufficiently given if sent by mail, postage prepaid, retum receipt requested or delivered personally:
(a)
As to the Authority: Housing and Redevelopment Authority
in and for the City of Monticello
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Attn: Executive Director
(b) As to the Developer:
15. This Agreement may be executed simultaneously in any number of counterparts, all
of which shall constitute one and the same instrwnent.
16. This Agreement shall be govemed by and construed in accordance with the laws of
the state of Minnesota. Any disputes, controversies, or claims arising out ofthis Agreement shall be
heard in the state or iedcral courts of Milmesota, and all parties to this Agreement waive any
objection to the jurisdiction of these courts, whether based on convenience or otherwise.
17. The Developer hereby agrees to protcct, defend and hold the Authority, the City
and their officers, elected and appointed officials, employecs, administrators, commissioners,
agents, and reprcsentatives harmless from and indcmnificd against any and all loss, cost, fines,
charges, damage and expenses, including, without limitation, reasonable attorncys fces,
consultant and expert witness fees, and travel associated therewith, due to claims or demands of
any kind whatsoever caused by Developer or arising out of actions of Developer (and excluding
those caused by or arising out of the Authority's or City's own acts or conduct) with regard to (i)
the developmcnt, marketing, sale or leasing of all or any part of the Property, including, without
limitation, any claims for any lien imposed by law for services, labor or materials furnished to or
for thc benefIt of the Propcrty, or (ii) any claim by the state of Minnesota or the Minncsota
Pollution Control Agency or any other person pertaining to the violation of any permits, orders,
decrces or demands madc by said persons or with regard to the presence of any pollutant,
contaminant or hazardous waste on thc Property; and (iii) or by reason of thc execution of this
Agreement or thc performance of this Agreement. The Developer, and the Dcveloper's
successors or assigns, agree to protect, defend and save thc Authority, and its officers, agents,
and employecs, harmless from all such claims, demands, damages, and causes of action and the
costs, disburscments, and expenses of defending the same, including but not limited to, attorneys
fees, consulting enginecring services, and other tcchnical, administrative or profcssional
assistance. This indemnity shall be continuing and shall survive the performance, termination or
cancellation of this Agreement. Nothing in this Agreemcnt shaU be construed as a I imitation of
or waiver by the Authority of any immunities, defenses, or other limitations on liability to which
the Authority is cntitled by law, including but not limited to thc maximum monetary limits on
liability establishcd by Minncsota Statutcs, Chapter 466.
SJH-200H95v2
MNi,)O-4i
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IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in
its name and behalf and its seal to he duly affixed hereto and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
[NAME OF DEVELOPER]
By
Its:
S./Fl-200895v2
MN190-41
7
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SJB-200895v2
MNI90-4!
HOUSING AND REDEVELOPMENT
AlJfHORITY IN AND FOR THE
CITY OF MONTICELLO, MINNESOTA
By
Its Chair
By
Its Executive Director
8
SEP-29-2005 09=36
~,9s05 THU 09:43 AM
WSB & ASSOCIATES
RL LARSON EXO [NO
FAX NO. 320 654 1021
7635411700
P.01/02
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Monticello MN 55362
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LHB, Inc.
21 West Superior Street, Suite 500
Duluth, MN 55802
Phone: 218.727.8446
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City of Monticello
Attn: Olive Koropchak
505 Walnut Street
Suite #1
Monticello, MN 55362
October 11, 2005
Project No: 050341.10
Invoice No: 0000002
Project 050341 ,10
Hourly Not to Exceed $5,400,00 plus mbursable Expenses
PrOYfi5Siolial Servic2sfrom September 1. 2005 to September 30. 2005
Professional Personnel
Hours Rate Amount
Principal
Fischer, Michael 12.00 171.00 2,052.00
Putnam, Jerry 6.00 105.00 630.00
Landscape Arch.
Chalupsky, Bruce 6.50 91.00 591.50
. Administration
Kurki, Terza 3,25 61.00 198.25
Totals 27,75 3,471.75
Total Labor 3,471.75
Reimbursable Expenses
Mailings/Deliveries
Total Reimbursables
28.87
28.87
28.87
Unit Billing
In-House Printing - Mpls
Total Units
670.0 Copies @ 0.15
100.50
100.50
100.50
Total this Invoice
$3,601.12
Labor
Expense
Unit
Totals
Current
3,471.75
28.87
100.50
3,601.12
Total
5.043.25
88,95
114,00
5,246.20
Billings to Date
.
Approved By: \"fP{l~ ·
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Ehlers & Associates, Inc.
leaders in Public Finance
3060 Centre POinte Drive
Roseville, MN 55113
(651) 697-8500
Financial Advisory Services Invoice
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City of Monticello
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
331458
October 10, 2005
Project: General
Date Worked
k
MTR
MTR
MTR
09-01-2005
09-22-2005
09~23-2005
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DescriPtion of Services
Hours
Amount
250.00
93.75
62.50
$406.25
I Amount Due This Invoice
$406.25
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Meeting on industrial park accounting
Discussions with Suntide
Times numbers for redevelopment
2.00
.75
------dQ
3.25
City of Monticello
Invoice #: 331458
Invoice Date: October 10, 2005
IA;-~unt Due T~i;~_~~_ice -_~-_~______:_:-_____~~~~~~~
l Please remit payme~t~ Ehlers ~ AsSOclates.ln~.-.-
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
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Ehlers & Associates, Inc.
leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Summary Statement
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Statement Date: October 10, 2005
Proiect
Amount
Invoice #
General
TIF District No. 1-35 - Redevelopment
$1,162.50
$2,250.00
331459
331460
Total for this statement
$3,412.50
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Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Financial Advisory Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
331459
October 10, 2005
proieG
Date Worked k Descriotion of Services
Hours
09-19.2005
09-19-2005
09-22-2005
ED
BMD
ED
Attended Meeting: Excess tif discussion with 0 Koropchak
Attended Meeting: and updated TIF proforma
Reviewed: Excess increment comments from OSA letter and
research, discuss with S Koropchak
Prepared: Times Redevelopment cashflow
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8.50
09-23-2005
ED
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~mount Due Thi;inv_oice
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Amount
3.00
2.00
2.50
375.00
350.00
312.50
125.00
$1,162.50
. $1 ,162.50-1
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Invoice #:
Invoice Date:
Amount Due This Invoice
331459
October 10, 2005
$1,162.50 I
Please remit payment to: Ehlers & Associates, Inc.
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
Due Upon Receipt
.
.
.
Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Financial Advisory Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
331460
October 10, 2005
Project: TIF District No. 1-35 - Redevelopment
Date Worked..fu.. Descriotion ot Services
MTR
Establishment ot TIF District No. 1-35 (2nd Halt)
I Amount Due This Invoice
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Hours
Amount
2.250.00
$2,250.00
~2,250:~~J
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Amount Due This Invoice
Invoice #:
Invoice Date:
331460
October 10, 2005
$2,250.001
Please remit payment to: Ehlers & Associates, Inc.
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
Due Upon Receipt
.
.
.
ORA Agenda - 11/02/05
8.
Executive Director's Report.
a) Landmark Square n - HRA Contract amended to read: "The $20,000 grant will be paid,
without interest, within 30-days after the date that the developer provides evidence satisfaetory
to the Authority as follows: proof of payment fo the acquisition and garagc removal costs,
completion ofthc parking improvements, and submission of lien waiver(s) from any contractors
employed by the developer for activities undertaken." Received a copy of the bank
commitment for construetion financing. Still need copy of "proof of parking". My
understanding Barry has purchased the Opal Stokes home. Brad Johnson has informed me thc
project costs have incrcased due to the requirements by the city for added landscaping, pavers,
and diagonal street parking. Thcy are looking at redueing the quality of the finished produet or
open to other fundi ng options.
b) Rocky Mtn Group LLC (Dahlheimer) - The License Agreement was amended to extend the
termination date to October 31, 2005, allowing redeveloper to continue construction of walls
and roof structure. The closing has been delayed again because of title issues. The termination
date is now extcnded to November 7,2005.
c) Twin City Die Castings - TCDC plans to and had approval to construct outdoor storage:
concrete slab, fencing and landscaping. Due to the revised application requirements and
process, the application is now incomplete, requiring drainage and utility information. Now
scheduled for the December Planning Commission cycle. TCDC was awarded the $270,000
Training Grant on October 24. Training will take place at the Monticello facility over the next
three years. The EDA authorized preparation of loan guidelines for the TCDC Federal payback
dollars: a lower interest rate etc. than the GMEf guidelines to encourage businesses to use
dollars. federal dollars require applicants to meet some IIUD criteria.
d) Manufacturer of Cood bases, sauces, and seasonings - Paul Kleinwachter, John Simola, and
Koropchak visited this company located in Dayton on September 21. The 1956 family-owned
business is looking to construct a 20,000 sq ft facility on approximately 2-acrcs spring 2006.
With no adverse impact to the Waste Water Treatment Plant, a proposal and cover letter was
mailed to the company. Paul, thanks for your nice Ictter. Total oftwcnty full-time permanent
jobs at an average wage-level of at least $20.70 ph without benefits. Sixteen jobs out of the
MN facility. Their contractor, Keystone Design Build, stopped in the City Hall for information.
Company doing bio~testing this week. Down to Monticcllo and Osseo.
e) Tapper's Holding Company - The approved GMEF Loan of $200,000 is scheduled to close
on November 1. The EDA loan is in 5th position behind the CMIF. This decision was made
because with a shared position, the CMIF required an Intercredit Agreement and the lender
advised against the shared position.
f) Fiber Optic Task Force began development of a request for proposal (RFP) on September
29. Their next meeting is November 17.
g) Copy of the response letter to OtTice of State Auditors regarding questions on the
.
HRA Agenda - 11/02/05
.
2003/2004 TIF reports.
h) Survey by League of Minnesota Cities - Compiling data from communities who have used
eminent domain for purpose other than public improvements. (I IRA-O'Connor parcel in
2001). LMC requesting to use city as case study.
i) Follow-ups - 200,000 sq ft manufacturer - United Properties (no response)
Great River Energy Headquarter Building - Looking f()[ 60 acres. Elk River offered 60
acrcs for $1 but not intercsted. New Prcsident wants Maple Grove area for image
purpose.
30,000 sq ft machine shop (gave offer/not interested) I'm OK with this.
60,000 sq ft builder of dump bodies, grain bodies, and trunk hoists. Responded with
first preliminary information and talked via phone. Needs outdoor storage.
10,000 sq ft uscr - reviewing for compliance. (Billboard)
17,000 sq ft user - requested completion of application. (BiIlboard through builder)
Invited to participate in the Minnesota Real Estate Seminar in Minneapolis in
December.
j) Marketing Committee - Mailed post cards to about 60 precision machining and medical
cquipment companies. Ad in Minneapolis Sunday paper classified ads. Will schcdule meeting
to visit site and re-Iook at site development and assess dollars spent to date.
k) A VR - The Planning Commission denied the re-zonc from II-A (Light Industrial) to 12
(1leavy Industrial). The Council over-turned the Commission and voted 4-1 to re-zone to
Ilcavy Industrial. Council member Mayer voted against. The city has made an offer to ^ VR
for their existing property and approximately 12-acres on the city-owned industrial land.
I) Chelsea Road extension - The rain delayed the reconstruction and realignment of 90th Strcet
at Chelsea Road. The utility and road/curb construction appears complete. Finaljift to the
road will be in the spring. Chadwick and myself checking on ribbon cutting event the morning
of No v 2.
m) Billboard lease on liRA property - Copy of Rick's letter.
n) TIF Newsletter.
0) ORA commissioners drive by the property located at 107 Locust Street. Brad
.Johnson said they were contacted about acquiring this property. They are not
interested but would be willing to be middle person if HRA is interested in property.
Will discuss at meeting.
p) Beginning in January, the Planning Commission will add a second meeting date on the yd
Tuesday of every other month for the purpose to commence discussion and plans for general
planning as it relates to updating the comp plan, park development, and downtown
rcdevelopment etc. All eommissions should be aware of this and assume will be involved in
the process.
.
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October 7,2005
MONTICELLO
Mr. Kurt Mueller
Office of the State Auditor
TIF Division
525 Park Street, Suite 500
St. Paul, MN 55103
Dear Mr. Mueller:
'J'hank you for your letter of September 21, 2005, acknowledging the City of Monticello's accurate
reporting and notification of a few problems within the 2003/2004 TIF reports. Each question or
comment is addressed by either an explanation and/or an amendment to 2004 TIF Report.
.
TIF District No. 1-5. Attached are the January 22, 1996, and June 24, 1996, modification of the
budgets for District No. ] -5. 'rhe paragraph in the center of Page 1-33 notes that tax increment may be
used to pay public improvements, interest on bonds or other obligations. Therefore, this is how the city
arrived at the $4,365,000 ($625,000+$990,000+$2,750,000) cumulative tax increment amount
reported on line 24, column B, of the 2004 TlF report.
It is the City's intent to spend the district's cash on either downtown redevelopment and/or acquisition
and public improvements associated with the development of the city-owned industrial park aU located
within the Project boundaries.
TIF District No. 1-6. The outstanding bond payments are made in accordance to the Bond and
Interest Payment Record. Additionally, there are outstanding projects to be completed; therefore, the
TIF District No. 1-6 has not been decertified.
TIF District No. 1-22. Attached is an amendment to the 2004 Report noting the $39,000,000
budgeted amount of bond proceeds and copy of Notes to OSA 2004 explaining the refinancing of the
temporary bond.
TIF Distriet No. 1-31. See the attached 2004 TIF Report reporting the pay-as-you-go obligations on
lines 74 through 80, Page 5, of the Report.
.
TIF Distriet No. 1-14. See attached copy ofTIF Plan, Page XV-5, Subsection 15.17 Estimated
Amount of Bonded Indebtedness.
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3 I 70. Fax: (763) 271-3272
.
.
.
Mr. Kurt Mueller
Office of the State Auditor
Page 2
TIF District No. 1-23. Attached is an amendment to the 2004 Report noting the amended revenue
budget.
TIF District No. 1-24. Attached is an amendment to the 2004 Report noting the amended revenue
budget.
TIF District No.. 1-26. See attached copy of the TIF Plan and amendment to the 2004 Report noting
the amended revenue budget.
TIF District No. 1-28. Attached is an amendment to the 2004 report noting the amended expenditure
budget.
Other Information. For the TIF Districts decertified in 2004, Check No. 80091 dated October 14,
2004, was issued to Wright County Auditor reimbursing the tax increment. In December, the Finance
Department reports the annual interest income. Therefore, with the districts decertified and
reimbursement paid to the County in October, no interest income was reported for 2004.
Again, thank you for bringing these problems to my attention. Should you have additional questions,
please call me at 763-271-3208.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
c:Jj0~.,
\ "/~
\~~.~ /'\
.. I I
""\
t,l .~ v"---~--~
Ollie Koropchak
Executive Director
c: Rick Wolfsteller, Administrator
2004 TlF Report File
LMC eminent domain case studies
Page 1 of 1
~\c
Ollie Koropchak
. From: Walker, Rachel [RWalker@LMNC.ORG]
Sent: Monday, October 24,20053:15 PM
To: Ollie Koropchak
Subject: LMC eminent domain case studies
Hello Ollie,
Thank you for taking the time to share your city's experiences with eminent domain with us. Over the last few
weeks, we have developed in-depth case studies of the use of eminent domain for economic
development/redevelopment/housing by about 18 cities across the state These case studies will be critical in the
League's efforts to defend cities' authority to use eminent domain in the future The League is working on a multi-
faceted strategy to emphasize the importance of this tool for redevelopment and other projects. As we move
forward in that effort, we hope to use the case studies in a variety of ways with different audiences, including:
Educational materials and forums for League member cities
One-on-one meetings with Legislators; handouts and other communication pieces for legislators
Testimony at Legislative hearings
Meetings with the Media
Contributing to National League of Cities communication materials on eminent domain
Handouts and other communication pieces for Other advocacy groups
Sessions at the LMC Annual Conference
.
We are asking permission to use your city's case study in one or more of the ways listed.
We will follow-up this email via phone calls in the next few days.
If you have any suggestions for how we can most effectively use the case studies, please share those ideas.
Thank you
Eric Willette
Rachel Walker
willette@lmnc.org
rwalker@lmncorg
651-281-1245
651-281-1236
Rache! Walker
Policy Research Assistant
league of Minnesota Cities
rwalker@lmnc.org
651-281-1236
. n_ __ _"','... ,_
This email has been scanned by the MessageLabs Email Security System.
For more information please visit http://www.messagelabs.com/email
.
10/24/2005
<Z (Y\ .
October 25, 2005
MONTICELLO
Mr. Raymond Kosis, General Manager
Tri-State Outdoor Media Group, Inc.
PO Box 1247
Titton, GA 31793
Re: Billboard Leases - 1-94/TH 25 - Permit # 3-4603, 3-4430 and 3-4389
Dear Mr. Kosis:
The City of Monticello Housing Authority has three real estate lease agreements with Tri-State Outdoor Media
Group for the location ofthree billboard signs on the HRA land. These lease agreements are for a period of
one year each with the right to renew for an additional like period with each lease agreement expiring December
3 I ,( of each year.
.
In order to cover increased costs that the HRA is incurring on this property and to keep in line with current
market rate conditions for billboard locations, the Monticello HRA will be increasing the annual lease rental
payments substantially beginning with the year 1-1-06. The current lease rates are substantially below the
prevailing market rate and the future rental rates will need to be adjusted to $7,000 annually for the double
sided billboards and $4,000 for the single sided structure. In addition, for year beginning January I, 2007, the
above amounts shall be increased by a 4% inflation factor for each billboard that remains.
If you would like to prepare a new lease agreement for each ofthe three billboard sites using the above
information and also including the inflation of factor of 4% annually after January 1,2007, please forward the
leases to the Monticello HRA for approval. If you would prefer, the City of Monticello can prepare lease
agreements and forward them to you for signatures.
Ifnew lease agreements are not negotiated and approved by November 30, 2005, this letter constitutes the City
of Monticello Housing Authority's notice that the existing lease agreements will be terminated on their
expiration date of 12-31-05.
The HRA looks forward to continuing our relationship with your company in the years ahead.
Sincerely,
CITY OF MONTICELLO
O~ {{//~1V\.
Rick Wolfsteller /'
City Administrator
.
~ Ollie Kor9pcha~, HRA Director
Lease File
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 · (763) 295-3170 . Fax: (763) 271-3272
.
.
.
C(; f\ ,
October 2005
Tax Increment Financing Division Newsletter
. TIF Technical Amendments: Date Adjustment
. Minnesota Legal Compliance Audit Guidejor Local Government
. Interfund Loan Requirementsjor TIF Expenditures
. Clar{fkalion: Tip From Authority Recently Audited
TIF Technical Amendments: Date Adiustmcnt
During the 2005 Legislative Session, the 50-80
income test tt1r rental properties (Minn. Stat. S
469.176 I, subd. 3) was repealed. The effective
date for this provision is June 30, 2004. Since it
was not the intent of the legislature to make the
repeal apply retroactively, please note that the
effective date for the repeal should be June 30,
2005.
Minncsota LC2al Compliance Audit Guide for
Local Covcrnmcnt
The office of the State Auditor is expanding its
Legal Compliance Audit Guide to include '1'1(<"-
related topics, includi ng TI F district decerti fieation
and segregation of '1'1 F funds. We anticipate the
newly expanded guide to be ready by the end of
October on our website under the "Educational
Materials" hyperlink at ww\v.auditor.state.mn.us.
Interfund Loan RCQuirements for TIF
Exuenditures
^ participant at the MNCPA Audits of Local
Governments Con ference asked why the TI F
Division requires the terms and conditions for
repayment of interfund loans tor TIF expenditures
be in writing and authorized by council
resolution. Others, as well, may be
interested in the answer. The TIF Act was
amended in 200 I to require that loans from
the general (or other) fund to finance TIF
expenditures must be authorized by
resolution before money is transferred,
advanced, or spent. The terms of repayment
must be in writing and include (i) the
principal amount of the loan, (ii) the interest
rate, and (iii) the maximum term. This TIF
amendment is effective tor loans and
advances made after July 31, 2001 tor all
post-1979 TIF districts. See Minn. Stat. S
469.178, subd. 7 for details.
Clarification: Till From Authority
Recentlv Audited
We wish to clarify that when a TIF audit is
in progress, the audit and its clements are
contidential. Financial information of an
authority is always public and can be
disclosed by an authority to the county
attorney if an authority wishes to discuss
and make efforts to correct an applicable
matter.
~lYOU have any questions please contact us:
Arlin Waelti
651-296-7979 Arlin. Waclli:il;slalc.rnn 11.1'
Kurt Mueller
651-297-3680 Kllrl, MucLL('r(ii\~1.g!.f!!1!LI!~
Usa McGuire
651-296-9255 rf.\'I! AflJ,uin'@Vf,!!.elnnus
Suk Shah
651-296-7001 SI!LSbJlhd)sralc, mn, us
Marsha Pattison
651-2%-4716 Marsha.PattisOlZ@,llq!s.J!!.j1,Us
Maggie Gebhard
651-2%-7446 Marzrzic, Cicbharq(i]:slalc, mn.lIs