HRA Agenda 10-06-2004
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, October 6, 2004 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners:
Chair Bill Fair, Vicc Chair Darrin Lahr, Dan Frie, Brad Barger, and Steve
Andrews.
Council Liaison:
Roger Carlson.
Staff: Rick Wolfsteller, Ollie Koropchak, and Angela Schumann.
Call to Order.
Consideration to approve the September 1, 2004 HRA minutes.
Consideration of adding or removing items from the agenda.
Consent Agenda.
Consideration to review a draft copy of the Monticello Transformation Horne Loan Program
Criteria, Application Form, and Remodeler Form for adjustments.
Consideration to adopt a resolution decertifying Economic TIF District No. 1-17 and No. ]-
21, to authorize close-out of five Economic TrF Districts, and to request the reimbursed tax be
allocated to the HRA General Fund.
7. Consideration to review and approve Performance Measure for the Otter Creek Crossing
Industrial Business Park.
8. Consideration to authorize payment ofHRA bills.
9. Consideration of Executive Director's Report.
10. Committee Reports.
] 1. Other Business.
12. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, Septemberl, 2004 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners Present:
Chair Bill Fair, Dan Frie, and Steve Andrews.
Commissioners Absent:
Vice Chair Darrin Lahr, Brad Barger, Roger Carlson.
S taiT:
Rick Wolfsteller, Ollie Koropchak, and Angela Schumann.
1. Call to Order.
Chairman Fair called the meeting to ordcr at 6:00 PM, declaring a quorum, noting the
absenee of Commissioner and Barger, and the absence of Liaison Carlson.
2. Consideration to approve the August 4, 2004 HRA minutes.
MOTION BY COMMISSIONER ANDREWS TO APPROVE THE MINUTES OF THE
AUGUST 4TH, 2004, HRA MEETING.
MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED.
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Consideration of adding or rcmovingitems from the agcnda.
4. Consent Agcnda
A. Consideration to approvc the Certificate of Completion associated with the
Contract for Private Redevelopment between the HRA, Hans Hagen Homes, and
the City of Monticello.
MOTION BY COMMISSIONER ANDREWS TO APPROVE THE CONSENT
AGENDA.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED.
5. Consideration to authorizc entering into a Preliminarv Development Agreemcnt for
redevclopment of Landmark Square II, Commercial proiect and deposit of $7,500.
Bard Johnson addressed the HRA on behalf on Masters 5th Avenue. Johnson presented a
conccpt plan which had bcen discussed with City staff earlicr that day. It is their plan to
move forward with the concept later in thc fall or as late as next spring. It is their
understanding that the drive-through represented on the plan will require a conditional
use pcrmit. Howcver, in discussions with stafe no major flaws werc found in the plan.
A brief discussion commenced on the existing garage structure near the site. Johnson
indicated that the garage is unablc to be moved at this time.
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The proposed mix for the Landmark Square Phase II project ineludes both restaurant and
retail opportunities. Johnson stated that they are currently in an aggressive lease mode.
The buildings are planned to be one and a half stories, somewhat like the downtown
Maple Grove coneept. It was noted that one utility pole will remain and will be included
in the landscaped island. Utilities would be moved underground. Limited parking
options prohibit second story office building. Johnson indicated that the only remaining
item to be determined is the feasibility for angled parking feasibility Locust Street due to
easement/boulevards concerns. The developers will work with engineering on this item.
They will also most likely add windows along coffee shop wall. Another possibility is
moving May from rock-faced EFIS to brick.
Fluth stated that they had purchascd the properties individually and then brought in the
corporation to develop the TIP assistancc.
Koropchak indicated that she had tried to contact Steve Bublc regarding the timing of the
acquisition and demolition as part of applicable costs. Koropehak questioned if the
establishment ofthc TIF district would qualify in the but-for test. Koropchak stated that
because this is most likely a pay-as-you-go, TIF can pay for site improvements.
Koropchak noted staff's comments provided in the staiTreport, ineluding the anglcd
parking on Locust and storm drainagc otIthe roof, as well as the CUP requirement.
Koropchak asked if Fluth was at a point whcre he would likc to enter into the preliminary
development agreement and provide the deposit of $7,500. Fluth stated that he would
recommend authorization ofthe development agreement.
Fric asked if this would generate enough TIP to make the project work. Johnson
indicated that the leasing of these buildings makes managing the project more feasible.
MOTION BY ANDREWS TO AUTHORIZE ENTERING INTO A PRELIMINARY
DEVELOPMENT AGREEMENT FOR LANDMARK SQUARE U, COMMERCIAL
WITH A DEPOSIT Of $7,500.
MOTION SECONDED BY COMMISSIONER LAI-IR. MOTION CARRIED.
Koropchak indicated that the HRA's signed copy of the DA would be available to Fluth
at City Hall.
It was noted that the developers would want to clarify the number of liquor licenses
available as related to this project.
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Consideration and feedback from meeting with lender and builder relative to the housing
remodel and redevelopment program criteria concept of the City of Richfield.
Fair and Koropehak reported that they had met with Mike Cyr, a builder in the
community and Paul Kleinwachter of I st Minnesota Bank regarding the project concept.
Koropchak's rcport outlined some of the discussion at that meeting. Both Cyr and
Kleinwachter felt that the first year would be more of a pilot project, using a limited
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amount of funds. Other ideas resulting from the meeting included involving those who
could help market the program for the City. Pilot project could also involve more of an
investment by the HRA per individual involvement, and a shorter forgiveness time frame.
It was also suggested that the HRA consider holding a workshop to discuss the idea.
Koropchak indicated that both 1st Minnesota and Cyr indicated that they would be
interested in working with the HRA on such a project.
Koropchak distributed materials illustrating City home valuations in the downtown area.
Those valuations include $100,000 and $100,000 - $150,000 single-family homes. The
diagrams provide the HRA with an idea of those that may meet the designed criteria.
Fair stated that the HRA needs to decide what improvements would be part of the
program. Fair noted that some of the old City lots may not support today's larger homes.
It was noted that the maps do not provide information on what type of structure may be
on the lot. Frie also noted that perhaps the assessor's information may not have been
updated, increasing the justified value.
Cyr and Kleinwachter had discussed major expansions as qualifying criteria. Fair
reminded the HRA that they may want to also consider taking a severely deteriorated
home and making $60,000 worth of improvements would be a major improvement.
Koropchak referred to Richfield's program, requiring a significant amount of investment
to maximize the HRA' s contribution.
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Andrews asked what the goal should be, for example higher taxes. He noted that
improvements would ultimatcly create higher valuations. Koropchak stated that
Richfield's program required increasing livable space.
Frie stated that perhaps the lIRA's goal should be updating or face-lifts to prevent further
deteriorations.
Minimum expense levels needs to be set. Frie asked who would determine the actual
valuation of the improvements. Koropchak stated that O'Neill and Patch were provided
with the information. Fair stated that by providing the information to the local builders, it
might hel p curb the need for a lot of staff review. Koropchak stated that the City's
inspector would still need to make a determination of whether the buildings are even
suitable for the project.
Lahr stated that one of the major goals should be to keep homes owner-occupied through
these upgrades.
Fair asked Frie as a realtor whether this program would be an incentivc to buyers. Frie
responded that it would requirc a certain kind ofbuycr. Fair stated that in many cases, it
may not be worthwhile under $100,000. Perhaps a bcttcr target would be the homes in
the $100,000- $150,000.
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Fair askcd if HRA wanted to consider it as a pilot project.
Lahr re-statcd owneH)ccupied goal. Fair asked if Koropchak could provide a list of the
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property owners in the $100,000-$150,000 range.
Andrews requested that the lIRA narrow the scope and prioritize in order to move
forward.
Lahr recommended that the program casting a wide net for the pilot project, then eonsider
all those that apply.
Fair recommended limiting the amount of funding for the first year. HE cited an example
of a percentage of 20%, capped at $20,000 per project for those homes under $150,000 in
the core community. The program could be interest free, if after five years, there is no re-
payment. If the property is sold within that five years, it has to be paid back.
Koropchak will develop the criteria based on the discussion and bring it back to the liRA.
Fair recommended also speaking with Patch for input from the Building Department.
7. Consideration to review a second Purchase Agreement for acceptance, rejection, or
counter-offer for the property located at 725 West 3rd Street.
MOTION BY COMMISSIONER FRIE TO REJECT TilE PURCHASE AGREEMENT
AS PRESENTED AND NOT INTERESTED.
MOTION SECONDED BY LAHR. MOTION CARRIED.
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Consideration to authorize payment of BRA bills.
MOTION BY COMMISSIONER ANDREWS TO AUTHORIZE PAYMENT OF HRA
BILLS.
MOTION SECONDED BY COMMISSIONER FRiE. MOTION CARRIED.
9. Consideration of Executive Director's Report.
Koropchak reviewed her report, indicating that Hans Hagen paid their balance from
notices. Fair inquired if all townhomes have been sold. Koropchak stated that she
understood that to be the case.
Koropchak has started reviewing Twin City Die Cast's information for TIF conformance.
According to what they've provided, they do meet their job requirements.
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Committee Reports.
The HRA held a brief discussion on keeping the downtown vibrant, through projects such
as the dcvclopment of entertainment venues and options.
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Other Business.
None.
12. Adjournment.
MOTION BY COMMISSIONER LAHR TO ADJOURN AT 7:20 PM.
MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED.
H RA Chair
Secretary
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HRA Agenda - 10/06/04
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Consideration to review a draft copv of the Monticello Transformation Loan l>rol!ram
Criteria. Application Form. and Remodeler Form for adiustment.
A. Reference and back~round:
At the September HRA meeting, the commissioners heard feedback from a meeting with
Banker Kleinwachter and Remodeler Cyr about the transformation program. The
commissioners suggested some specific criteria making no final decision to implement the
program.
The Executive Director has prepared a draft copy of a Monticello Transformation Ilome
Program based on suggestions made by the commissioners. See attachments.
A couple of questions: Does the HRA or City have the manpower or expertise to offer the
Remodeling Advisor Service or Design Advice Service? Can those services be handled
privately? Are they necessary for the success of the program?
I called Steve Bubul to ask about the need for the lIRA to complete a Pre-Remodeling
Condition Report to meet city financing and auditing requirements. Since thesc are pooling
dollars from TIf District No. 1-22, the home targeted for remodeling must meet the defInition
of substandard and requires an inspection.
Lastly, is there any reason to identify a time-line for completion ofthe remodeling project or
disbursement of loan dollars?
TRANSFORMATION HOME LOAN
2005 Application Package
(763) 271-3208
MONTICELW
PURPOSE
A "home transformation" means a major home remodel, increasing its livable space and its
value. Residents who enjoy living in the core city and know the benefits of living within
walking distance of the Mississippi River, the community center, and the schools are choosing
to adapt their existing homes to meet their current needs. The Transformation Home Loan
was developed to provide incentives for homeowners or home buyers in Monticello to begin
major remodeling activity.
The Transformation Home Loan seeks to promote and foster a vibrant core city by:
· Encouraging home owner-occupancy.
· Encouraging investment into the core city.
· Increasing housing market value.
TARGET AREA
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The Transformation Home Loan program is available for existing single-family detached
homes located within the core city described as:
· North ofI-94.
· East of Otter Creek
· South of Mississippi River.
· West ofJ-Iospital and Middle School.
TARGET VALUE
The Transformation Home Loan program is available for existing single-family detached
homes with a 2004 assessed market value of $150,000 or less.
Program Features:
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Remodeling Advisor Services.
_~n""'"._._.__..m.__..._ will provide initial remodeling
advice as well as on-going assistance as you plan your project. An
attachcd lcttcr cxplains potential services provided. Leave a messagc
with on the Remodeling Connection: 763
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Monticello City Hall, 505 Walnut Street, Suite 1, 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
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Design Advice Services. _., is a
design advisor who can meet you in your home to discuss design
options. Such advice may be pmiicularly useful when you're
changing floor layouts or blending in an addition. Call _'-_
answering service at _ and reference the Monticello
remodeling program.
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.. The Transformation Loan. The Monticello Housing and
Redevelopment Authority (HRA) characterized the Transformation
Loan as an "incentive loan". The incentive is just a little more
financing with terrific terms, so that a homeowner may feel equipped
to move forward on their remodeling project. To apply for the loan,
the cost of your remodeling project must be $50,000 or more. The
loan may be 20% of your remodeling project, when the cost of
remodeling is $50,000 or more. The maximum loan amount is
$20,000. The loan is interest-free, and is payable upon sale of your
property or forgiven after five (5) years. If you have questions, call
763-27 I -3208. Funds are limited.
Application Procedure:
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Prior to starting your proiect obtain this application package which includes the
Remodeling Advisor letter, builder requircments and summary of design
consideration, loan application form, and a Remodcler Form for remodelcrs who have
not worked undcr the program previously.
Submit a complcte application. A commitment of funds can only be madc when all
required items have been received. Plcase note: The City a/Monticello's Building
Department must approve all huilding plans, and may have requirements
independent olio an requirements. All setback and zoning requirements must
also be met.
Applications will be revicwed on a first-come, first-served basis, with priority being
givcn to projects that are most ready to move forward. Project readiness will be
dctcrmined by those that have completed drawings, have total project funding in place
(e.g. have a loan eommitment or have closed on mortgage financing), and lor have a
remodeler undcr contract. Funding will not be held for projects that are not ready.
Once an application and other requircd documents have been received and reviewcd,
a loan commitment will be made.
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Conditions of the Transformation Incentive Loan:
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Submitted applications will be reviewed lor appropriateness and completeness.
Projects generally must be value-added improvements such as expanding space.
Plans will be reviewed for design considerations.
2. The loan will be calculated at up to 20% of the initial contract price if the contract
price for remodeling is $50,000 or more, but not to exceed $20,000. The
commitment of funds is made at the beginning of the project.
3. Funds are limited. You may want to call ahead of time to find out if funds are still
available.
4. A Pre-Remodeling Condition Report is required by the HRA to meet city financing
and auditing requirements. A property evaluator (not an appraiser) contracted by the
."}. HRA will spend approximately an hour at your home to assess the age of mechanical
systems, measure square footage, and otherwise note the condition of the home prior
to remodeling. This is a one-time report f()f HRA records and incurs no cost to the
homeowner.
5. Loans will not be considered for work in progress or work completed. The
Transfl)[mation Loan can only be considered for projects not yet begun.
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You will be sent a commitment letter verifying the reservation of funds to be provided
at closing. A copy of the letter may also be provided to your lender. Check with
lenders?????
7. Upon satisfactory verification of work in progress, or upon completion, payments wi II
be disbursed at the discretion of the lender or the HRA. If you are obtaining
mortgage financing, your financing will likely be placed in atl escrow account held by
the lender. The escrow account will be drawn upon in pro-rated increments
simultaneously as funds are drawn upon from the primary loan to make payments to
the remodeler.
Please be informed that financial data submitted to the HRA for purposes of the loan
application is considered private, according to Minnesota Statute Chapter 13. However, the
fact that you apply for a loan and the tlnalloan amounts are considered public data according
to the same statute.
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Gencral Remodeler and Dcsign Criteria:
The BRA does not recommend any particular remodeler. Selected remodelers must
complete a Remodeler From, and comply with the general criteria established by the
Monticello HRA. "Sweat equity" cannot be included under the Transformation program.
Summary of Rcmodeler Requirements
It is the homeowner's responsibility to check on contractors thoroughly before selecting them.
Your builder should:
1. Demonstrate financial capability by providing a statement from a financial institution of
sufficient construction capital.
Possess adequate Builder's Risk, Comprchensive General Liability and Worker's
Compensation insurance coveragc.
Ilave a written warranty policy to be shared with the homeowner or written evidence
of commitment to pcrform warranted repairs required by the Minnesota State Statute.
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If the remodeler has not participated in the Transformation Home Program previously, the
HRA will require a Remodeler Forum to be completed. A form is attached.
Summarv of Housing Desil!n
The liRA will require the following:
1. Each home shall remain a detached single-family dwelling.
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Each home shall be owner-occupied.
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Garage space may be maintained or expanded, but not reduced.
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The house building lines, roof lines, doors and window placement should minimize
blank wall mass. House and garage orientation to the street must present a balanced
and pleasing view from all sides.
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Exterior materials should be low maintenance. Masonite type siding materials are not
acceptable.
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The site must be fully landscaped, including attractively placed foundation plantings
and complete sod installation, lot line to lot line.
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Adjoining properties must not be disturbed by the construction process. Construction
planning is important since five foot side yard setbacks limit construction space.
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The construction process, site grading, and the finished structure must improve or not
have a detrimental impact on storm water drainage patterns in the neighborhood. Re-
working an existing site grade to improve neighborhood drainage may be requested.
If a roof is pitched towards neighboring homes, gutters may need to be installed to
divert storm water, in addition to improved grading.
If you would like to consult with someone regarding any remodeling issues, call the
Remodeling Advisor at
Trallsl(:lnnaliOIlI.oan.do~ 2004
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TRANSFORMATION HOME APPLICATION FORM
. General Information:
Name(s) of OWl1er(s) (as they appear on title)
Present Address
Phone Number(s)~_
Future Address (if buying to remodel)
Remodeling Information:
Description of improvements to be done
When do you plan on remodeling?
Name of Architect or Designer
Name of Remodeler
Attach a list of contractors if a general contractor is not being used.
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Financing Information:
Estimated amount of contract $
Appraised value of prope11y upon completion (if lender financed) $
Name of Lender
Type of financing (second mortgage/refinance/home equity line, etc.)__
Anticipated closing date
Source of financing if not lender financed
Requirements for a complete application
Check off all that apply; provide explanation for those not completed.
____ A copy ofthe cost estimate(s) and description of improvements is attached.
Building plans are attached (both floor plans and exterior elevations).
Site plan is attached (for additions that require crawl space or foundation).
Ready to schedule a pre-remodeling condition evaluation (arranged by the Monticello HRA).
Please explain if an item is not checked:
Send completed application and attachments to:
Monticello HRA
505 Walnut Street, Suite 1
Monticello, MN 55362
Attention: Ollie Koropchak
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To the fullest extcnt permitted by law, the Homeowner agrees to defend, indemnify and hold harmless
the HRA and the City of Monticello, their officers, agents and employees from and against all claims,
loss, damage, costs and expense arising from bodily or personal injury or sickness, illness, or death of
persons or damage to property resulting from or allcged to have resulted from the Remodeler's work
and opcrations.
Owner
Owner
Date
Date
Trnnsfollllal iOl mppl iC[ll i on. form
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MONTICELLO REMODELING PROGRAM
REMODELER FORM
Business Nan1e:
Phone No.:
Fax No.:
E-Mail:
Business Address:
Contact Person:
I. How many years has your company been in business?
2. In the past three years, what has been the average number of homes your company has
remodeled per year?
3. In the past three years, what has been the average remodeling contract price by your company?
4.
Attach copy of your company warranty policy.
Yes
No
5. You agree that you have the ability, at all times during the term of the Remodeling Contract, to
have and keep in force the following minimum insurance coverages:
COVERAGE:
Workers Compensation
Employer's Liability
Comprehensive General
Independent Contractors
Products/Completed
Contractual Liability
Personal Injury Liability
"XCU" Liability (if applicable)
Broad Form Property
Comprehensive Automobilc
for owned, hired, and
automobiles
LIMITS:
Statutory
$300,000 Bl & PD
Included
Included
Included
Included
Incl uded
Included
Includcd
$300,000 BI & PD
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6.
You meet Minnesota state licensing requirements. Yes
No
7.
Please list municipalities in which you have secured remodeling permits within the past 3-5
years and indicate the name of the City staff person (building official or other) with whom you
had the most contact.
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8. Provide names, addresses and telephone numbers of five customer references that we may
contact as references.
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9. Provide names, addresses and telephone number of three major suppliers or sub-contractors
that we may contact as references.
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The information contained on this form may be provided to lenders, homeowners, and others interested
in participating in Monticello Remodeling Programs.
By:
Its:
Date:
Rcmodcler. form
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6.
Consideration to adopt a resolution decertifying Economic TIF District No. 1-17 and
No. 1-21. to authorize close-out of five Economic TIF Districts. and to request the
reimbursed tax be allocated to the HRA General Fund.
A. Reference and back2:round:
DECERTIFICATION AND CLOSE-OUT
Following completion ofthe 2003 Annual Tax Increment Financing Reports prepared for the
State Auditor in July 2004, it is a good time to review management issues relating to TIF
Districts. Due to the 1990 TIF restrictions, the HRA docs not have the flexibility to pool
dollars outside districts and the 5-year activity rule is applicable. Therefore, it is recommended
to close-out the district and pay the County the tax increment. Having confirm cd this with
Mark Ruff, Ehlers & Associates, and Finance Director Wolfsteller, it is recommended the HRA
decertify and closc certain districts. Each district has been reviewed and adjusted for the 10%
administration allowance and a cross check has been done to verify the ending balance of each
district between the HRA TIF Reports and City Financial Reports. The debt has been retired
in each of these districts. The following is a recap of the five Economic Districts.
Economic TIF Districts recommended for decertification:
TIF District No. 1-17 (Fay-Mar) early decertification - Required decertification is 8/2005 -
Ending Balance $101,8529/04.
TIF District No. 1-21 (Lake Tool) early decertification - Required decertification is 11/2007.
After $285 10% adm adjustment (transfer in from HRA General Fund), the Ending Balance
$14,6519/04.
Economic T1F Districts recommcnded for close-out:
TIF District No. 1-17 (Fay-Mar) See above.
TIF District No. 1-21 (Lakc Tool) See above.
TIF District No. 1-15 (Custom Canopy) Decertified 2/2003 - Ending Balance $39,000
TIF District No. 1-14 (Suburban) Decertified 8/2002 - Ending Balance $12,904
TIF District No. 1-13 (Standard Iron) Decertified 8/2004 - Ending Balance $141,724 9/04
HRA Agenda - 10/06/04
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The total amount of tax increment from the five economic districts to be paid to the County is
$310,131. As in 2003, the County disburses the tax increment among the taxing jurisdictions in
the form of reimbursed tax.
REQUEST FOR REIMBURSED TAX
In 2003, the HRA closed-out 7 districts and paid the County $246,002 in tax incremcnt. The
City was reimbursed $118,091 in taxes which was allocated for the BRA General Fund. Using
the 2004 City Tax Rate, the City would anticipates receiving approximately $142,660 of the
paid $310,131 tax increment. The HRA would be requesting the amount of the taxes
rcimbursed to the City be allocated to the BRA General Fund. Remember, the HRA General
Fund is non-restrictive funds of which have been committed for industrial land acquisition.
B. Alternative Action:
DECERTIFICAf'ION
I. A motion to adopt a resolution decertifying TIF District No. 1-17 and a resolution
decertifying TIF District No. 1-21.
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2.
A motion to deny adoption of a resolution decertifying TIF District NO. 1-17 and a
rcsolution decertifying TIF District No. 1-21.
CLOSE-OUT
1. Amotion to authorize c1ose-outofTIF District Nos ]-17, 1-21, 1-]5, 1-14, and 1-13
and to pay the County $310,131 thc total amount of the tax increment.
2. A motion to deny closc-out ofTIF District Nos. 1-17, 1-21,1-15, 1-14, and 1-13.
REQUEST FOR REIMBURSED TAX
1.
A motion requesting the reimbursed tax paid to the City by the County resulting from
the above closed-out nF Districts be allocated to the HRA General Fund.
2.
A motion to not request the reimhursed tax paid to the City by the County resulting
from the above closed-out TIF Districts be allocated to the HRA General Fund.
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HRA Agenda - 10/06/04
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Recommendation:
Recommendation is Alternative No.1 for all three action items. This concurs with Mark Ruff
and Rick Wolfsteller's recommendation and complies with the Minnesota Statutory. With this
action, the HRA has 14 remaining active TIF Distriets. Since 1983, the liRA created 30 TIF
Districts.
D. Supporting Data:
Copy of resolution for early decertification.
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HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
ST A TE OF MINNESOTA
Resolution No.
BEING A RESOLUTION APPROVING THE DECERTIFICATION OF
TAX INCREMENT FINANCING ])ISTRICT NO. 1-17
OF THE CITY OF MONTICELLO.
WHEREAS, on August 8. 1994 the Housing and Rcdevelopment Authority (the "Authority") in
and for the City of Monticello (the "City") created Tax Increment Finance District No....l..:...l2 (the
"District") within the Central Monticello Redevelopment Project No. I (the "Project"); and
WHEREAS, as of the date hereof all bonds and obligations to which tax increment from the District
have been pledged have been paid in full or defeased and all other costs of the Project have been paid;
and
WHEREAS, the Tax Increment Financing Plan adopt on August 8. 1994 for Tax Increment
Financing District No. 1-17 requires, pursuant to M.S. 469.176, Subcl. 1. that the duration of the Tax
Increment Financing District 1-17 will be nine years after the date of receipt by the City ofthc first tax
increment or eleven years from approval of the tax increment financing plan, whichever is less, and
WHEREAS, the receipt of first tax increment was Julv of 1997, and
WHEREAS, August 8. 2005 is cleven years from the approval of the tax increment financing plan,
which is the lesser, and
WHEREAS, the Authority desires by this resolution to cause thc decertification due to its early
termination of the District after which all property taxes generated by property within the District will be
distributed in the same manner as all other property taxes beginning the second half of 2004.
NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for
the City of Monticello, Minnesota, that the Authority's staff shall take such action as is necessary to
cause the County Auditor of Wright County to decertify the District as a tax increment district and to no
longer remit tax increment from the District to the City.
DA TED:
,2004
HRA Chair
ATTEST:
Executive Director
(Seal)
.
.
.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
STATE OF MINNESOTA
Resolution No.
BEING A RESOLUTION APPROVING THE DECERTIFICATION OF
TAX INCREMENT FINANCING DISTRICT NO. 1-21
OF THE CITY OF MONTICELLO.
WHEREAS, on November 12. 1996 the Housing and Redevelopment Authority (the "Authority")
in and for the City of Monticello (the "City") created Tax Increment Finance District No. -L:ll (the
"District") within the Central Monticello Redevelopment Project No. I (the "Project"); and
WHEREAS, as of the date hereof all bonds and obligations to which tax increment from the District
have been pledged have been paid in full or defeased and all other costs of the Project have been paid;
and
WHEREAS, the Tax Incremcnt Financing Plan adopt on November 12, 1996 t()r Tax Increment
Financing District No. 1-21 requires, pursuant to M.S. 469.176, Subcl. I, that the duration ofthe 'fax
Increment Financing District 1-21 will be nine years after the date of receipt by the City of the first tax
increment or eleven years from approval of the tax increment financing plan, whichever is less, and
WHEREAS, the receipt of first tax increment was Julv of 1999, and
WHEREAS, November 12, 2007 is eleven years from the approval of the tax increment financing
plan, which is the lesser, and
WHEREAS, the Authority desircs by this resolution to cause the decertification due to its early
termination of the District after which all property taxes generated by property within the District will be
distributed in the same manner as all other property taxes beginning the second half of2004.
NOW TI IEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for
the City of Monticello, Minnesota, that the Authority's staff shall take such action as is necessary to
cause the County Auditor of Wright County to decertify the District as a tax increment district and to no
longer rcmit tax increment from the District to the City.
DA TED:
,2004
HRA Chair
ATTEST:
Executive Director
(Seal)
.
.
.
HRA Agenda - 10/06/04
7.
Consideration to review and approve Performance Measure for the Otter Creek
Crossing: Industrial Business Park.
A. Reference and backl!round:
The HRA has committed a substantial amount of dollars toward the purchase of the Chadwick
property known as Otter Creek Crossing and the HRA will in the future create TIF Districts to
retire for the public improvement bond and trunk fees associated with the development. The
land purchase transaction from the City/lIRA to the developer will be part of the Contract for
Private Development. A Performance Measure (see attachment) has been drafted for your
review and approval. The Executive Director will review this with you at the meeting.
Additionally, the Executive Director would like some input on proposed zoning and covenants.
Zoning options: 1-2 Heavy Industrial, I-I Light Industrial or 11A Business Campus/Light
Industrial.
Chadwick and the City have signed the Development Agreement and Assessment Agreement
and the City purchased the Rask property on September 30. The 120 acres plus 47 acres is
now annexed into the City. The Rask parccI annexation resolution should be accepted by the
State Board in mid-October. It is anticipated that the Chadwick 47 acres, Rask parcel, and
city 120 acres will be platted and heard at the November Planning Commission meeting. The
city 120 acres will be platted as an Outlot. The request for zoning from the city could be
simultaneous with the platting.
The Executive Director prepared and presented a land acquisition proposal to Dahlheimer
based on assumptions as the Council did authorize plans and specs for the 1-94 and County
Road 18 interchange project.
The Lift Station, Chelsea Road, and utility infrastructure bids must be submitted by May 1,
2005.
Additionally, a draft copy of A Location Site and Development Guide and a<Customer
Requirement Worksheet has been prepared for review by the Marketing Committee.
B. Alternative Action:
I. A motion to approve the Performance Measure for the Otter Creek Crossing Industrial
Business Park.
HRA Agenda - 10/06/04
.
2.
A motion to not establish a Performance Measure for the Otter Creek Crossing
Industrial Business Parle
C. Recommendation:
The City Administrator has reviewed the draft copy. One of the things we discussed was
making sure we are covered the purchase price of 120 acres as the net acres for development
is about 85 acres ($.818 per sq ft. needed). The discount price will go up with inflation.
D. Supporting: Data.
Copy of the Performance Measure, example and concept map.
.
.
2
.
.
.
CITY OF MONTICELLO
OTTER CREEK CROSSING BUSINESS PARK
PERFORMANCE MEASURE
2004
FOR DISCOUNT PRICE $.95 per square foot
Jobs per acre:
6 full-time equivalent jobs/acre
Average hourly wage:
$15.75 ph excluding benefits
Land to building ratio:
4.35:1 sq ft (1 acre: 10,000 sq ft)
Developed new market value:
$400,000 per acre*
Open storage
Covenants to be established
Not allowed
Irrigation - exterior materials - landscaping
Years to payback incentives:
5 years
Return on investment:
12.6 (Yo
MAXIMUM LAND TO SELL ONE USER
1) Building size X 2 = max area for building 2) max area for building X 2 = area of parking. 3) 1 + 2 X
15% =? 4) 1 + 2 + 3 =" Total Maximum land to sell one user. Maximum land for sale minus land area
by performance measure is sold at market value ($1.60 per square foot).
******************************************************************************
* $400,000 /acre market value x 5 acres = $2,000,000 Annual taxes $51,025 less Adm $5,102 = '1'1
$45,923 X 8 years = $367,384. $183,692 NPV.
City Costs: $32,250 /a infrastructure
$11,845 /a trunk fees
$25,265 /a land
TOTAL $69,360/a
Return:
$41,382 pIa land ($.95 sq. ft.)
$36,738 pIa TIF
TOTAL
$78 ,120 pIa
.
.
.
EXAMPLE
50,000 SQ FT BUILDING MAXIMUM OF 5 ACRES IF NEW MARKET V ALLIE IS AT LEAST
$2 MILLION AND 30 JOBS ARE CREATED WITII A VERAGE HOURLY WAGES AT $15.75
WITHOUT BENEFITS.
1) 50,000 x 2 = 100,000 sq 1'1.
2) 100,000 x 2 = 200,000 sq n.
3) 300,000 X .15% = 45,000 sq ft
4) 345,000 sq ft maximum or 7.92 acres
First 5 acres at $.95 per sq ft = $206,910
Next 2.92 aeres at $1.60 sq ft = $203,512
7.92 acres = $410,422 (up-front) no assessment (2005 improvements), no trunk fees, and no park
fees. Upon development of the 2.92 acres the difference between the 2004 trunk fees and year
developed fees must be paid.
.
.
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HRA Agenda - 10/06/04
9.
Executive Director's Report:
a) Landmark Square II update - Barry Fluth did sign the Preliminary Development Agreement
and deposit a check for $7,500; however, he asked that I not deposit the check until they have
more firm commitments. Brad requested I run some TlF casht10w projections for the proposed
10,900 sq ft commercial building. I called the County Assessor to see what value they used for
Town Center, Locust Street, and Landmark Square I commercial. Using $60 a square foot the
project generated about $150,000 NPV over 25 years. The Planning/Building Department has
not received any applications or plans. I left a message for Barry about the October agenda
but no word. Ifthcy appear for an update, it will be an add-on item.
b) 725 W 3 Street - The real estate agent picked up the August 17 Purchase Agreement on
September 24. She was notified after the September HRA meeting ofthe commissioner's
motion.
b.5) Torn Holthaus is exploring sources of funds to fill a gap of about $40,000 to redevelop the
Westside Market sitc on West County Road 75.
c) Front Porch - The HRA has not received thc balance of the Administrative Over-run Costs
billed to Mike Cyr, August 14, in the amount of $2,045.50. The Finance Department will bill
Cyr with a 30-day notice until late charges start to accrue.
.. d) Market Committee needs to meet to discuss and implement marketing strategies for Otter
Creek. At the meeting a draft copy of the "How to Site and Develop Your Business in the City
of Monticello, Minnesota" and a Customer Requirement Worksheet prepared at the request of
the Marketing Committee will be distributed.
e) Minnesota Development Conference - October 6 and 7, at The Depot.
f) Industrial Real Estate & Logistics Conference, November 3, Golden Valley Country Club
g) Economic Development Partnership of Wright County held a retreat to define goals and
objectives for the next upcoming years. About 30+ people attended the morning session held
at Wright-I lennepin Electric.
h) Industrial leads -
- Dahlheimer Distributing - A proposal was prepared and presented to the Dahlheimer's on
September 28. The proposal was an offer from the City of Monticello for acquisition ofland in
Otter Creek Crossing. The proposal was based on a performance measure.
- 28,000 sq ft manufacturing facility - A proposal was prepared for this request and sent
September 15. The company plans to narrow their site selection by October 10 and will
proceed to visit sites thereafter.
- 30+ acres - A proposal was prepared and mailed to a Chicago firm researching for
commercial/industrial property of greater than 30 acres. Mailed September 22.
- 51,000 sq ft industrial/condominium facility - Monticello and Chaska two identified areas.
Waiting for final numbers and approved performance measure bcf()re continued follow-up
- In conversation with a local individual looking for a small one to two acre site.