City Council Minutes 02-13-2012 SpecialMINUTES
SPECIAL WORKSHOP /MEETING — MONTICELLO CITY COUNCIL
Monday, February 13, 2012 — 6:00 p.m.
Mississippi Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Absent: None
Others: Jeff O'Neill, Torn Iselly, Bret Weiss, Joel Jamnik, John Chadwick, Angela
Schumann, Bruce Westby
1. Call to Order
Mayor Herbst called the Special Meeting to order at 6 p.m.
2. Purpose of Workshop: Discussion of options related to John Chadwick assessments
Jeff O'Neill explained that John Chadwick had requested an opportunity to discuss the
assessments on land owned by him and J. Bowers with Council. Jeff handed around an
outline to discuss history, project outcomes, assessments, options, and Council direction.
3. Consideration of directing staff regarding action on John Chadwick property
Jeff O'Neill asked John Chadwick to talk briefly about his assessments and land
situation. John Chadwick mentioned his support of the Monticello community and
projects that he has developed. He talked about his involvement with sorne of the
industrial projects such as Jefferson Commons. He discussed the evolution of the
Rermnele property and how that eventually was traded off to the City. He reviewed some
of the big box developments that were developed on land that was originally industrial
land and rezoned to commercial. John Chadwick commented that each of those
developments hurt his ability to develop his commercial property located along the
freeway.
Jeff O'Neill noted that the City really never felt that John Chadwick's property would be
used for big box type of commercial development. That corridor already was built up
with car dealers and Moon Motors, with the land to the west considered for industrial
development. Per John Chadwick's request, the zoning was changed from industrial to
commercial some years ago.
Bret Weiss talked about the development of the Otter Creek Industrial Park and Chelsea
Road project. Originally, the Rask house was located on land that was bought by Denny
Hecker for development of his car dealership. The City negotiated a deal with Hecker for
land used for the Chelsea Road alignment at quite a significant amount of $2.1 million.
At that time, the assessment formula was developed to accommodate the cost of the land
for the right -of -way property on the Chelsea Road project. The formula was based on
usable front footage with John Chadwick's property absorbing the larger percentage, as
he had quite a bit more developable land.
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John Chadwick commented that, looking back, it might have been better to divide up the
land in a different manner. He noted that there is no historical evidence that the land
along the freeway would have been valued that much higher. Glen Posusta commented
that he recalled sitting in the meeting and thinking that John Chadwick's land was the
most valuable and wondered why the City did not get a share of the better land, which
may have resulted in a different allocation of the assessments. Lloyd Hilgart commented
that a lot of people invested in property during the years of the good economy and paid
too much. He felt that John Chadwick's property might have better value if there would
be an interchange built in that area. Bret Weiss stated that the City did not have any
intention of building an interchange in that area so that would not have been a factor at
the time.
Jeff O'Neill noted that Tom Kelly put together some options that Council could look at if
they feel there is merit in John Chadwick's concerns. It was noted that the City is
responsible for the bond payments regardless of any options that might be taken.
a. Prepare a new assessment program (not recommended as there are a number of
obstacles to overcome)
b. Purchase a piece of land from John Chadwick based on assessment value (not
recommended as this would produce a very small piece of land that would
probably not be useful to the City)
c. Purchase land from John Chadwick and /or Bowers (possible if City perceives
there would be future value; potentially the City could take back the land through
forfeiture if taxes and assessments are not paid)
Brian Stumpf asked if the $2.60 per sq ft for a purchase would be based on both John
Chadwick and Bowers property and who would be responsible for the assessments? Jeff
O'Neill explained that the rate could be applied for a purchase of either John Chadwick
and /or Bowers land. John Chadwick stated that he would pay off the balance of the
assessments and Bowers would take care of the balance on his property.
Glen Posusta suggested that perhaps the purchase of land should be considered by the
Economic Development Authority (EDA). Tom Kelly commented that the EDA general
fund could be used toward that but not the excess funds that need to be spent by the end
of the year. Jeff O'Neill explained that Tom Kelly does not recommend that the City
invest in land for which they do not have an immediate purpose as that would put Undue
pressure on the City's financial condition. If Council is interested in looking at a land
purchase, they should direct staff to look into this further and meet again to discuss.
Jeff O'Neill asked if anyone feels that the assessment process was done in an unfair
manner. Clint Herbst commented that he thinks the methodology was done with the
proper intent; unfortunately the market inflated the prices at the time.
John Chadwick commented that the City did lower the interest rate from 6.5 percent to
5.5 percent, which he appreciated. Clint Herbst asked Tom Kelly what the City is paying
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now on those bonds. Tom Kelly explained that the bonds were advance refunded so there
is a lower rate now on those bonds. Clint Herbst suggested that perhaps one thing the
City could do for John Chadwick would be to lower his interest rate.
There was some discussion about the possibility of a future interchange in this area,
where the City would purchase the land for that. Clint Herbst stated that he thinks CR 39
is still the better choice for a new freeway interchange. There is more space available
and gives more flexibility for future access to that area. Bret Weiss concurred with that
and noted that the area by John Chadwick's land would be much tighter. He estimated
that it would probably cost $25 -30 million for an interchange on the west end. Clint
Herbst noted that it is likely there could be a future need for an interchange especially
with the development of Bertram Park.
Jeff O'Neill summarized that it appears that the discussion should be moved to the EDA
to consider options for purchase of the property from John Chadwick and possibly
Bowers as part of future economic development goals. Clint Herbst asked John
Chadwick if he is also speaking for Bowers, and John Chadwick said that he had
discussed this with him and he is willing to be part of a deal with the City.
Tom Perrault asked if there was a possibility of adjusting the financing for the special
assessments. It was pointed out that has already been done. Clint Herbst suggested
keeping in mind that the City could consider lowering the interest rate.
Council consensus was to turn this over to the EDA for consideration of land purchase
and possibly look at changing the terns of the assessment.
4. Adjournment
TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:47 P.M.
LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Catherine M. Shuman tlgi
Approved: February 27, 2012
Attest: /
Ci nr rator
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