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EDA Meeting Minutes - 10/09/2024MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, October 9, 2024 — 6:00 p.m. Academy Room, Monticello Community Center ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING Academy Room 4:45 p.m. Review and Discussion of Tax Abatement Pre -Application — Twin Pines Multi -Family Proposal 5:15 p.m. Review and Discussion of Proposed Downtown Facade Improvement Forgivable Loan - Monticello Family Dentistry 5:40 p.m. Review and Discussion of Proposed Downtown Fagade Improvement Forgivable Loan — Mattress Store Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig, 011ie Koropchak-White, Rick Barger, Tracy Hinz, Mayor Lloyd Hilgart Commissioners Absent: Lloyd Hilgart excused himself at 7:14 p.m. for a MOAA meeting. Staff Present: Executive Director Jim Thares, Community Development Director Angela Schumann, Community and Economic Development Coordinator Tyler Bevier 1. General Business A. Call to Order President Steve Johnson called the regular meeting of the Monticello EDA to order at 6:00 p.m. B. Roll Call 6:00 p.m. Mr. Johnson called the roll. 2. Consideration of Additional Agenda Items A. Mr. Johnson indicated that the EDA should add an item at the beginning of the regular agenda related to the Facade Improvement Forgivable Loan Proposal for the Sleep Concepts Mattress Store located at 149 West Broadway. 3. Consent Agenda A. Consideration of Payment of Bills B. Consideration of Approving Regular Meeting Minutes — August 14, 2024 C. Consideration of Approving Joint Workshop Meeting Minutes — September 16, 2024 MAYOR HILGART MOVED TO APPROVE THE CONSENT AGENDA. HALT SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 4. Regular Agenda A. Added Item — Monticello Dental Clinic (201 West Broadway) — Facade Improvement Forgivable Loan Pre -Application Review and Discussion Economic Development Director Jim Thares gave an overview of the forgivable loan proposal. There was not enough time in the Workshop meeting just prior to the Regular meeting to do a pre -review of this proposal. Mr. Thares explained if the EDA concludes that it is a worthy project, the EDA attorney can prepare the various loan documents (loan agreement, promissory note, security agreement, etc.) for a formal consideration in an upcoming meeting. The target date for the final consideration would be the October 23rd regular meeting. The application in the packet is complete. It was noted that all four walls are proposed to be stained with the classic brick look with Walnut side door, and exterior signage will be updated. The specific facade work consists of staining of the brick fagade, concrete repairs to the base of the building, a new door on Walnut Street and a refreshed awning. Jim Thares explained that the project quotes for all the work items total $13,172. The building owner -applicants are required to contribute 5% of the funding or $659 of the project cost. The fagade program currently has $150,003 available. The applicants were invited to the podium for any additional information. Christian Block and Steve Bjorn of Monticello Family Dentistry spoke about the repairs to the building in the past including signage and tuckpointing. The building is estimated to be over 110 years old. Councilmember Tracy Hinz appreciated the individual staining of each brick element. Steve Bjorn spoke about the desire to keep the classic red brick color. Mayor Lloyd Hilgart noted that the relocation of the power poles will happen soon which will enhance the visual appeal from the alleyway. Mr. Johson spoke about the history of the building and the need for a update and was glad to see the building being maintained and indicated that he supports this proposal. Mayor Hilgart asked if the rear awning is being refreshed or reconstructed. The applicant said they have had discussions with the City building department about the proposal to refresh the awning versus a reconstruction. Steve Johnson also asked about water runoff the back of the building. Steve Bjorn explained his understanding about the water drainage off the building roof. Steve Bjorn indicated that they hope to complete the work by late November or early December. B. Consideration of Tax Abatement Pre -Application from Broadway Plaza in connection with a proposed 76-room Grand Stay Hotel and a 10,000 square foot Convention Center and a 4,500 square foot Restaurant Jim Thares began with the pre -application overview for the Broadway Plaza hotel, conference center and restaurant. Broadway Holdings is seeking financial assistance for the property. As a pre -application this is not a full application, additional information would be needed for further consideration. The development is proposed on a 7.8-acre site located along 1-94 on the east edge of the city. The proposal is projected to cost $21,168,000. The preliminary plat has been approved. A tax abatement policy was approved by the City Council in 2023 as an economic development tool similar to Tax Increment Financing (TIF). Mr. Thares pointed out that this project is a slightly different from the Fairfield By Marriott hotel as it has a 10,000 square foot convention center. He reminded the EDA that the City Council approved the use of Tax Abatement for that project in late July 2024. He further pointed out that it is the EDA's role to review proposals and provide a recommendation to the City Council on Tax Abatement requests. Mr. Thares referenced the EDA commissioned 2023 Hotel Study which recommends the City provide financial support to attract an upper-midscale hotel to the City. The hotel portion of the project is aiming to create 32 jobs, while the conference center will create 22 jobs, and the restaurant is expected to create 27 jobs. The vintage automobile museum is projected to create 4 jobs. That is a total of 85 jobs. Mr. Thares pointed out there is anecdotal evidence that the Convention Center is a community need. It and the vintage automobile museum will offer unique attributes and may increase overall commercial activity in the City. Mayor Hilgart asked what the hotel study implied as the need for more room capacity in Monticello. Jim responded that the Study indicated that the City should strive to attract a new upper-midscale hotel with 85 — 100 hotel rooms to address the findings that travelers are not staying here and choosing to stay in similar hotesl in nearby communities along 1-94. Mayor Hilgart asked how many units were approved with the Fairfield Hotel. Mr. Thares said that hotel development proposal includes 98 rooms. Mayor Hilgart asked if the market might be saturated based on the hotel study. Mike Schneider introduced himself, and spoke about the hotel, event center, restaurant and museum that is all part of the property. Mike Scheider stated that there is a great deal of interest in the event center, with all the facility elements complementing each other. Mr. Johnson asked how a public subsidy can demonstrate the need in a market that may be saturated. Mike Schneider responded that the event center changes the demand and increases the need for the hotel rooms. Mr. Johnson suggested that the applicant include more narrative and supporting information about how the event center, restaurant and museum will increase demand for hotel rooms. Jon Morphew appreciated the event center aspect with the hotel and asked to see more details in a formal application. Hali Sittig asked if the event center would create a need for the hotel. Mr. Schneider stated that the event center would contribute to the hotel. He also said that the brand Grand Stay has extended stay rooms which is another draw. Ms. Sittig asked about the security of their contract with Vita Bella restaurant. Mr. Schneider stated that Vita Bella was keen on the site because of the event center. Mr. Johnson summarized that there seems to be positive feedback among the EDA for the applicant to move towards a formal application. Council Member Tracy Hinz reviewed the requirements for the Tax Abatement and felt that this project could meet all requirements. Rick Barger spoke about the application pairing the four items together, the hotel, museum, restaurant and event center. Mike Schneider clarified that the car museum is geared towards tourism, and it is a small component of the proposal. Ms. Sittig asked if there would be cars sold on site. Mr. Scheider said that there was no intention of this to be a car dealership. The consensus of the EDA is to recommend the developer continue to pursue the application with answers to the inquiries posed by the Commission. C. Consideration of Resolution 2024-20 authorizing an Amendment of the Block 52 Purchase and Development Contract with Block 52 Holdings, LLC, Buchholz ExchanEe. LLC and Noreren ExchanEe. LLC Mr. Thares opened the item asking for authorization of a First Amendment to the Purchase and TIF development Contract to increase by $50,000 to a total of $417,400 and provided an overview of the improvements from the parking lot to landscaping and sidewalks. Mr. Johnson asked if the funding is above what they originally expected. He further stated that it recalls that proposed funding was not in the original agreement and the developer is expected to cover all costs exceeding the original amount. Ms. Sittig asked for justification for needing public subsidy from the applicant. Mr. Morphew pointed out that costs are now 37% higher than 15 months ago. Mr. Thares stated these are all fair questions and said staff would ask the developer to address those questions. HALI SITTIG MOVED TO TABLE THE ITEM. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. D. Consideration of Requesting the City Council reimburse the EDA for paid Special Assessments on the 14.16-acre parcel of land (PID # 155-282-000010) in connection with the acquisition from Riverwood Bank in December 2023 and further to continue to defer the 429 Special Assessments for an additional 10 years or until the property is sold for development Mr. Thares introduced the item. When the EDA purchased the Riverwood Bank site along West 7th Street in December 2023, the 14.16-acre parcel (PID 155-282- 000010) had deferred special assessments against it which sunset in May 2023. The assessments were for the extension of 7th Street West and site stormwater ponding. As a part of the purchase, assessments were assumed with the intent of deferring the payment until development. Mr. Thares explained that the total special assessment amount is $553,828 and carries an interest rate of 5.5%. The timing of the EDA purchase of the parcel in late 2023 occurred after the City had to certify the assessment roll for CY 2024. As a result, the EDA paid the property taxes on the parcel in May 2024 as well as one installment of the assessments. The assessment payment amount was $34,335.84 in principle and $127,185.66 interest. The EDA is asked to approve and ask the City to reimburse the EDA for the 429 Special Assessment payment that was made in connection with the purchase transaction for the 14.16-acre parcel of land along 7th Street West and further request the City Council place the Special Assessment for the amount assumed from Riverwood Bank into deferred status until the property is sold for development. TRACY HINZ MOTIONED TO REQUEST THE CITY COUNCIL TO REIMBURSE THE EDA FOR PAID SPECIAL ASSESSMENTS ON THE 14.16-ACRE PARCEL OF LAND (PID # 155- 282-000010) IN CONNECTION WITH THE ACQUISITION FROM RIVERWOOD BANK IN DECEMBER 2023 AND FURTHER TO CONTINUE TO DEFER THE 429 SPECIAL ASSESSMENTS FOR AN ADDITIONAL 10 YEARS OR UNTIL THE PROPERTY IS SOLD FOR DEVELOPMENT, OLLIE WHITE SECONDED THE MOTION. MOTION CARRIED UNAMIOUSLY, 6-0. Other Business A. Consideration of Economic Development Manager's Report Mr. Thares provided an overview of the agenda item to the EDA and the public. Adjournment TRACY HINZ MOVED TO ADJOURN. HALI SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 6-0. MEETING ADJOURNED AT 7:29 P.M. Recorder: Approved: Attest: Vicki Leerhoff 4 December 11, 2024 s Thares, Economic Development Manager