EDA Agenda 05-09-2012EDA MEETING
Wednesday, May 9, 2012
6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie,
Rod Dragsten and Council members Tom Perrault and Brian Stumpf
Staff. Executive Director Megan Barnett- Livgard, Finance Director Tom Kelly
1. Call to Order
2. Approve Meeting Minutes:
a. April 9, 2012
b. April 11, 2012
3. Consideration of additional agenda items
4. Consideration of adopting Resolution #2012 -041 approving a Purchase Agreement
between Fred & Pat Culp and the Monticello EDA
5. Consideration of authorizing a Phase II Environmental Site Assessment for the property
located at 349 Broadway Street (Fred's Auto)
6. Director Report (verbal)
a. New city logo
b. Commercial Broker tour
c. Proposed Podawiltz Development
d. Grow MN visits
e. Greater MSP
f. Transportation Update
7. Adjourn
MINUTES
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Monday, April 9, 2012 - 5:30 p.m.
Commissioners Present: President Bill Demeules, Treasurer Bill Tapper, Tracy Hinz, Matt Frie,
and Council Members Tom Perrault and Brian Stumpf
Staff: Executive Director Megan Barnett - Livgard, Finance Director Tom Kelly
1. Call to Order
Bill Demeules called the special meeting to order at 5:30 p.m.
2. Purpose
The purpose of the special meeting is to interview a candidate for the volunteer position on
the EDA for a term of six years. Rod Dragsten was the only applicant.
3. Consideration of Candidate
The EDA asked that Dragsten respond to five standard interview questions in an effort to
highlight his qualifications for serving on the EDA.
Dragsten answered questions related to his experience and residency in Monticello. He
noted that he had some familiarity with tax increment financing and would expect to learn
more about it as projects were brought forward.
Dragsten indicated that he didn't forsee any potential conflicts of interest with his work. He
would resign from the Planning Commission if offered the EDA position and was
comfortable with a six year term commitment. He indicated that regular 2 "a Wednesday
monthly EDA meeting works in his schedule.
Staff provided Dragsten a packet of current EDA information for his review. He thanked
the EDA for their consideration and left the meeting.
The EDA had no further discussion. Staff had prepared a report to bring before City
Council for approval later in the evening should the appointment be recommended by the
EDA.
Vote on EDA Appointment
BRIAN STUMPF MOVED TO RECOMMEND THAT THE CITY COUNCIL
APPROVE THE APPOINTMENT OF ROD DRAGSTEN TO THE OPEN EDA
COMMISSIONER POSITION FOR A SIX YEAR TERM. MOTION WAS SECONDED
Economic Development Authority Minutes 04/09/12
BY BILL TAPPER. MOTION CARRIED 6 -0.
5. Adiournment
BILL TAPPER MOVED TO ADJOURN THE SPECIAL MEETING AT 5:45 PM.
MOTION WAS SECONDED BY TOM PERRAULT. MOTION CARRIED 6 -0.
Recorder: Kerry T. Burn
Approved: May 9, 2012
Attest:
Executive
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MINUTES
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, April 11, 2012 - 6:00 p.m.
Commissioners Present: President Bill Demeules, Treasurer Bill Tapper, Tracy Hinz, Matt Frie,
and Council Members Tom Perrault and Brian Stumpf
Staff: Executive Director Megan Barnett - Livgard, Finance Director Tom Kelly
Others: Linda Jacobson, Bill Kemp, Todd Hagen, Brett Weiss, John Chadwick
1. Call to Order
Bill Demeules called the meeting to order at 6 p.m.
2. Approve Meeting Minutes
BILL TAPPER MOVED TO APPROVE THE MARCH 14, 2012 EDA MINUTES.
MOTION WAS SECONDED BY BRIAN STUMPF. MOTION CARRIED 6 -0.
3. Consideration of additional agenda items
a) Resolution #2012 -036 approving two purchase agreements for Montgomery Farms
property
4. Consideration of approving a GMEF loan for Jacobson Veterinary Urgent Care
Clinic
The Monticello Pet Hospital (Jacobson Properties) recently obtained a $50,000 dollar
GMEF loan to assist in expanding their existing pet clinic facility located off of Highway
25. The new facility is located behind Wal -mart and construction is almost complete.
The Jacobsons would like to include opening an animal urgent care facility as part of their
relocation and business expansion plans based on their analysis of area demand. The
proposed new business would bring in 13 new full time livable wage paying jobs to the
community. Monticello Pet Hospital requested a $140,000 dollar GMEF loan to assist in
opening an after -hours urgent care veterinary facility. The requested loan will be utilized
for equipment purchases in an effort to free up "cash" that can be utilized for working
capital.
BRIAN STUMPF MOVED TO ADOPT RESOLUTION #2012 -035 APPROVING A
GMEF LOAN FOR MONTICELLO PET HOSPITAL. MOTION WAS SECONDED BY
TRACY HINZ. MOTION CARRIED 6 -0.
Economic Development Authority Minutes 04/11/12
5. Presentation by Podawiltz Development: proposing a subsidized rental townhouse
ro'ect
Bill Kemp from Podawiltz Development discussed an opportunity to construct affordable
workforce rental townhomes in Monticello. The development would require the creation of
a new housing TIF district. He reviewed their product line, financing structure, income
guidelines, desired location and timeline. They are looking to purchase 36 of the 72 parcels
available in the Autumn Ridge townhome development and build rental townhomes. This
project would involve a federal housing tax credits program administered by the MN
Housing Finance Agency (MHFA). It is not a rental subsidy program. Podawiltz
Development has completed similar projects recently in Buffalo and Sartell.
There was some discussion as to the value of establishing a TIF District for housing. Todd
Hagen from Ehlers responded to some questions about residential TIF districts and
decertification options once an obligation is met.
The EDA was asked to provide some general direction to the developer regarding the
proposed rental townhouse development. As the EDA was not unanimous in its support,
staff recommended that the issue be brought forward for City Council review at its April
23rd meeting.
6. Consideration of purchasing property zoned B -4 and owned by John Chadwick
City Council had directed the EDA to review the option of purchasing John Chadwick's
19.08 acre parcel located north of Chelsea Road for the purpose of economic development
and/or a future interchange as part of its consideration of his request to amend the special
assessments on the property.
Staff indicated that there is a significant demand for large tracts of land with a minimum of
20 -75 acres on which to build. Staff does not believe Mr. Chadwick's parcel is the best
location and land configuration for a future industrial park. The EDA will need to analyze
if purchasing Mr. Chadwick's property is at a price worth paying holding costs until such
time as smaller lot industries begin to initiate new construction projects and /or an exact
location of an interchange is determined and initiated.
Bret Weiss from WSB Engineering indicated that concepts had been developed for a
potential future interchange location but that no action had been taken. Upon preliminary
analyses of a future interchange location within the Otter Creek vicinity, it was determined
that John Chadwick's property would not be needed.
John Chadwick is asking $2,077,810 for the subject property. There are outstanding taxes
and an outstanding assessment on the property. If the EDA were to purchase the property it
is anticipated that the EDA general fund would be the funding source. Currently the EDA
Economic Development Authority Minutes 04 /11/12
has a general fund balance of 2.8 million. It should be noted that financial resources are
limited and the EDA may find it difficult to purchase Mr. Chadwick's parcel and continue
to invest in the downtown.
John Chadwick of 4477 Manitou Road in Excelsior asked a few related questions of Bret
Weiss. He pointed out that the land is valuable in that it is freeway frontage.
TRACY HINZ MOVED TO DENY PURCHASING MR. CHADWICK'S PARCEL.
MOTION WAS SECONDED BY BRIAN STUMPF. MOTION CARRIED 6 -0.
7. Consideration of cancelling the listing agreement between Commercial Realty
Solutions and the Monticello EDA and discuss the idea of creating a broker incentive
fee for the Monticello Business Center
City staff is often more active in the negotiations and interactions with companies than the
listed broker when providing TIF assistance in the industrial park. As a member of
MNCAR the EDA has access to list industrial property on the MLS database to gain
commercial broker exposure. Staff has also arranged for a commercial broker breakfast
and tour of city on April 27th. It doesn't appear to be cost effective to maintain the listing
agreement with Commercial Realty Solutions at this time.
Additionally, in an effort to incentivize brokers to pay attention to Monticello, staff
recommended creating a $3,000 dollar Broker Incentive Fee for the industrial park. The
terms or commissions of a normal land transaction would remain the same. If a broker
brought a client to the City that became a viable project in the Monticello Business Center,
that broker would receive a $3,000 dollar "bonus" after the property closed. The proposed
incentive fee would be a pilot program and be reviewed on a yearly basis.
BILL TAPPER MOVED TO CANCEL THE LISTING AGREEMENT FOR THE
MONTICELLO BUSINESS CENTER BETWEEN THE MONTICELLO EDA AND
COMMERCIAL REALTY SOLUTIONS FOR THE MONTICELLO BUSINESS
CENTER. MOTION WAS SECONDED BY BRIAN STUMPF. MOTION CARRIED
6 -0.
BRIAN STUMPF MOVED TO DIRECT STAFF TO WORK WITH KENNEDY AND
GRAVEN TO DETERMINE VIABLE TERMS AND PARAMETERS TO IMPLEMENT
A BROKER INCENTIVE FEE FOR THE MONTICELLO BUSINESS CENTER.
MOTION WAS SECONDED BY BILL TAPPER. MOTION CARRIED 6 -0.
8. Director Report
The City received a plaque from the Initiative Foundation in thanks for its donation.
City Council approved increasing the city's water and sewer rates by 8% and 12 %,
3
Economic Development Authority Minutes 04/11/12
respectively. Tom Kelly stated that the increased rates are still one of the lowest in the area.
New rates will only cover only the cost of operations. Asset replacement costs may require
a future bond issue.
Bill Tapper asked why the City was not awarded the DEED Redevelopment Grant. Staff
pointed out that the grants are competitive and often are awarded to cities within the metro
area. The City will apply for this grant again and apply for the Small Cities grant as well.
Matt Frie asked about the status of a potential purchase of a second liquor store near the
new interchange off of Broadway in Monticello. Tom Kelly stated that staff and the
property owner are currently still in negotiations, however it does appear that an agreement
will be reached soon. The funds would be from the current liquor store fund and be repaid
through profit from the new store.
9. Consideration of items added to the aeenda
a) Resolution #2012 -036 approving two purchase agreements for Montgomery Farms
property
BILL TAPPER MOVED TO APPROVE THE RESOLUTION TO ACCEPT A
PURCHASE AGREEMENT FOR THE MONTGOMERY FARMS PROPERTY.
MOTION WAS SECONDED BY MATT FRIE. MOTION CARRIED 6 -0.
10. Adjournment
BILL TAPPER MOVED TO ADJOURN THE MEETING AT 7:20 PM. BRIAN
STUMPF SECONDED THE MOTION. MOTION CARRIED 6 -0.
Recorder:
Approved: May • 2012
M 1 W I oi, I -1
t
EDA: 5/9/2012
4. Consideration of adopting Resolution #2012 -041 approving a Purchase Agreement
between Fred and Pat Culp and the Monticello EDA.
A. REFERENCE AND BACKGROUND:
The EDA made at motion in a closed session with the City Council on April 11, 2012 to
purchase the property located at 349 Broadway Street, aka Fred's Auto. Kennedy & Graven
has prepared a Purchase Agreement and Resolution for the EDA to adopt.
The Purchase Agreement stipulates the following terms:
a. purchase price of $84,000
b. understanding that there is no longer a business on site and therefore relocation
benefits do not apply
c. identifying that the appropriate environmental assessment will be completed on the
property prior to closing
Al. Budget Impact: The EDA has the option to utilize surplus TIF from district 1 -5 to
purchase the property. However, any dollars received for a future sale will most likely
have to be classified as TIF and returned to the State. The other option is to utilize
general funds. The EDA does have sufficient funds in the general fund to purchase the
property.
B. ALTERNATIVE ACTIONS:
1. Motion to adopt Resolution #2012 -041 approving the Purchase Agreement between
the Fred and Pat Culp and the Monticello EDA.
2. Motion to table for further research and discussion.
C. STAFF RECOMMENDATION:
City Staff recommends adopting Resolution #2012 -041 approving the purchase agreement
between Fred and Pat Culp and the Monticello EDA.
D. ATTACHMENTS:
a. Resolution #2012 -041
b. Purchase Agreement
EDA RESOLUTION NO. 2012 -041
RESOLUTION APPROVING PURCHASE AGREEMENT
BETWEEN THE CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY AND FREDERICK J. AND
PATRICIA R. CULP
BE IT RESOLVED BY the Board of Commissioners ('Board ") of the City of Monticello
Economic Development Authority, Monticello, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. The Authority and Frederick J. and Patricia R Culp (together, the "Seller ") desire to
enter into a purchase agreement (the "Purchase Agreement ") pursuant to which the Authority will
acquire certain property in the downtown area of the City (the "Property") from the Seller for
economic redevelopment purposes related to the revitalization of the downtown area. The Property
is described in Exhibit A attached hereto.
1.02. Pursuant to the Purchase Agreement, the Authority will purchase the Property from
the Seller for a total purchase price of $84,000 plus related closing costs.
1.03. The Authority finds that acquisition of the Property conforms to the City of
Monticello Redevelopment Priorities and Policies, as approved by the City and Authority, and will
facilitate the economic redevelopment and revitalization of the downtown area of the City.
Section 2. Purchase Agreement Approved.
2.01. The Authority hereby approves the Purchase Agreement in substantially the form
presented to the Authority, subject to modifications that do not alter the substance of the
transaction and that are approved by the President and Executive Director, provided that
execution of the Purchase Agreement by those officials shall be conclusive evidence of their
approval.
2.02. Authority staff and officials are authorized to take all actions necessary to perform
the Authority's obligations under the Purchase Agreement as a whole, including without
limitation execution of any documents to which the Authority is a party referenced in or attached
to the Purchase Agreement, and any deed or other documents necessary to acquire the Property
from the Seller, all as described in the Purchase Agreement.
Approved this 9th day of May, 2012, by the Board of Commissioners of the City of Monticello
Economic Development Authority.
President
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403150A MNI MN325 -26
ATTEST:
Executive Director
101IM:10.10W_1
PROPERTY
The South '' /z of Lots 1, 2, and 3, Block 50, Original Plat Monticello, Wright County, Minnesota.
403150A MNI MN325 -26
EDA: 5/9/2012
5. Consideration of authorizing a Phase II Environmental Site Assessment for the property
located at 349 Broadway Street W (Fred's Auto).
A. REFERENCE AND BACKGROUND:
The EDA approved purchasing the property known as Fred's Auto (349 Broadway Street).
The purchase agreement does require an environmental assessment to be completed on the
property prior to closing. Staff contacted Braun Intertec and Pro Source requesting quotes to
complete a Phase II Environmental Assessment.
Banks typically require a Phase I to be completed, however the EDA does not need to obtain
bank financing to purchase said property. Also, completing a Phase I will identify the history
of the property and state there could be environmental concerns. The City is already aware
that potential environmental concerns are possible on the property due to the previous service
station operation. A Phase II will encompass soil borings and hopefully evaluate whether
potential sources of soil contamination have impacted the property.
At the time of writing this report, staff has only received a quote from Braun Intertec. The
anticipated cost to complete the Phase II is $5,248.00
Staff will forward the quote from Pro Source upon receipt.
Al. Budget Impact: Staff will apply for a Contamination Investigation & Clean up grant.
The next round of applications is due November 1, 2012. The proposed cost is
anticipated to be allocated from the general fund. However, staff is researching to
verify if surplus TIF can be utilized.
B. ALTERNATIVE ACTIONS:
1. Motion to authorize to complete a Phase II Environmental Site Assessment
on the property known as 329 Broadway Street.
2. Motion to deny authorizing a Phase II Environmental Site Assessment be completed.
3. Motion to table for further research and discussion.
C. STAFF RECOMMENDATION:
City Staff recommends authorizing the appropriate environmental firm to complete a Phase II
Environmental Site Assessment.
D. ATTACHMENTS:
a. Braun Intertec quote