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HRA Agenda 12-05-1985AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Thursday, December 5, 1985 - 7:OOPM Members: Chair Gary Wieber, Ren Maus, Bud Schrupp, Roger Hedtke, and Ben Smith. 1. Call to Order. 2. Approval of the Minutes of the Regular Meeting held November 7. 1985. 3. Approval of the Minutes of the Special Meeting held November 12, 1985. 4. Bergetad Properties Report. 5. Olson Property Appraisals. 6. Consideration of a Resolution Authorizing the Execution of a Tax Increment Pledge Agreement - Raindance Properties. 7. Other Business. 8. Adjournment. R4 MINUTES HOUSING AND REDEVELOPMENT AUTHORITY y Thursday, November 7, 1985 - 7:OOPM Members Present: Chair Wieber, Bud Schrupp, Ken Maus, Roger Hedtke, and Ben Smith. Assisting as Staff Representative: Tom Eidem, City Administrator. Chairperson Wieber called the NRA meeting to order at 7:07PM. Ken Maus moved to approve the Thursday, October 10, 1985, Minutes, seconded by Roger Hedtke, and carried unanimously. As part of State requirements, a Public Hearing on the Disposition of Public Lands, (Lots 1-10, Block 15, Original Plat, City of Monticello), was heard without comment or testimony from the general public. The said public hearing was closed. The third item on the agenda was the consideration to grant a 90 -day extension on Real Estate Loan 084022 between the Wright County State Bank and the Monticello Housing and Redevelopment Authority, expiration date, November 9, 1985. Consideration for granting an extension on an optional agreement between the Housing and Redevelopment Authority and Metcalf/Larson for the same said project was discussed as the expiration date on the agreement is December 19, 1985. Interest on Loan 184022 for a 90 -day extension is $1,121.92 and Metcalf/Larson's monthly payment on the optional agreement is $400. Attorney Brad Larson represented the Metcalf/Larson Elderly Project. Mr. Larson reported project plans were approved, the Farmers Home Loan Bid was in, however. State authorization was delaying the project. Normal authorization is scheduled by November 15, 1985. Ken Maus moved to grant a 90 -day extension on Loan 084022 at the Wright County State Bank and to grant an extension of the HRA and Metcalf/Larson optional agreement on December 19, 1985, if needed. Seconded by Bud Schrupp. Passed 4-1. Chairperson Wiaber asked the HRA to consider Items 9 and 10,first, which would be of greater convenience to John Bergetad. Item 9 to the consideration of the Kadvclopment Project Area Modification. Mr. Bergetad presented hie proposed Elderly Project, before the Committee took action to approve modification of the Redevelopment Project Area. The project is for a 25 -unit intermediate care rental facility for persona 75-85 years of age on the present Nursing Home site (Lots 1-6, Block 39, Lower Monticello). John Bergetad's marketing research and Minnesota Housing indicates Monticello can support 20-25 unite. The proposed plan would house ton 1-bodroom unite, two 1-bodroom plus den unite, and thrao 2-bodroom unite in the present structure; and eight 1-bodroom unite and two 2 -bedroom unite in the one story expanded addition. BRA MINUTES - 11/7/85 The present living and dining areas would remain as is with an additional courtyard, altered roof lines, and a new exterior face to the building. This is not subsidized housing but intended for former home owners for security and hospital service needs. Rental would be approximately $450-550 per month. Barbara Schwientek, Hospital Administrator, expressed the theory of the project had the Hospital Boards approval, however, finances still' needed to be worked out. The Nursing Home's market value is $715,000.00, based on the purchase price, existing bonds are $650,000.00. The Hospital would provide meals, emergency call and care system, and a concern time line. Tom Eidem explained the procedure necessary to allow the Bergstad Project the option of Tax Increment Finance (TIF). The Federal Budget Committee may take away muncipal bond issuance for industrial benefits. This to be effective January 1, 1986 makes the project difficult. City Staff recommends the Committee to approve consideration to modify 'the Redevelopment Project Plan and to approve consideration of concept and use of Tax Increment Finance at this meeting. Staff also recommends a special HRA meeting be set for Tuesday. November 12, 1985 at 4:OOPM, City Hall, to consider adoption of Modification 02 of the Central Monticello Redevelopment Plan and to consider adoption of Tax Increment District V. Motion was made by Ben Smith, seconded by Ken Maus to meet Tuesday. November 12, 1985, 4:OOPM for a special meeting. Passed 5-0. Other items of concern discussed among the Committee, John Bergstad, and Tom Eidem were as followed: The amount of Tax Increment to be captured. The need for John Bergstad to negotiate a purchase price for the Nursing Home with the Hospital Board which would make the project feasible. Next, qualifications needed to reside in the proposed new housing. Does the Monticello area warrant another elderly housing project? Types of services and maintenance provided by the proposed facility. Concerns of adequate parking were also discussed. John Bergstad explained to the Committee the elderly housing formula applied in his market study. The study revealed the need for this typo of elderly project in Monticello, however, Mr. Bargstad was unaware of the proposed Metcalf/Larson elderly project at the time of his research. He stated the project would hurt but his project was not subsidized housing and provided intermediate caro. Chair Cary Wieber reiteriatod the discussion and asked for a motion. Bud Schrupp motioned to consider the Modification of the Central Monticello Redevelopment Plan to include Lots 38 and 39, Lower Monticello. Seconded by Roger Hodtko. Passed unanimously. Chair Wiabor then asked for a motion to order preparation of Tax Increment Proposed Plan and Tax Increment Finance Plan for the November 12th meeting. Ken Maus made a motion to approve the concept and the use of Tax Increment Finance for the Bergstad Properties. Seconded by Ban Smith. Passed unanimously. The next item on the agenda was the consideration to adopt the Raindance Properties Development Agreement. The soon-to-be vacated Maus Food Building was of prima concern In the Development Agreement. -2- HRA MINUTES - 11/7/85 The Committee expressed the need to protect downtown Monticello from blighted buildings to overly strict controls on vacated buildings which may stop growth. City Administrator Eldem explained the Development Agreement in theory, stating the City of Monticello's need for a letter of credit from Raindance Properties and the approval of the proposed vacated agreement in the development agreement. The proposed vacated agreement reads that Raindance Properties shall provide 12 months attention to fill the vacated Maus Building or a $16,250.00 payment at the end of 12 months if said building is not filled. City Staff recommended that the HRA adopt the Development Agreement and present the agreement to the Developer, Raindance Properties, for approval or disapproval. (At this time the developer had not signed the development agreement prepared by Holmes d Craven). A motion to adopt the Raindance Properties Development Agreement, as stated above, was made by Bud Schrupp, seconded by Roger Hedtke. Passed 4-0. Maus abstention was due to personal interest. Next, the HRA discussed the purchase of public lands from Wilbur Eck and the City of Monticello. Appraised land acquisition was based on comparable land with allowance for soil corrections and allowance for Block 15, not being a legal sire block because of State Highway 25 and the City interceptor sever easements. Chair Wieber asked for a motion to excute documents for the purchase and sell of said property. A motion by Roger Hedtke for the Monticello HRA to purchase public lands (Block 15, Lots 1-6, Original Plat, City of Monticello) from Wilbur Eck for $139,000.00 and to purchase public lands (Block 15, Lots 7-10, Original Plat, City of Monticello) from the City of Monticello for $90,000.00. Total land acquisition of $229.000.00 Seconded by Ben Smith. Passed 4-0. Maus abstention was due to personal interest. The next item on the agenda was for the HRA to excute the sell of said property to Raindance Properties. A motion to sell Block 15, Lots 1-10, Original Plat, City of Monticello, to Raindance Properties for $62,000.00 for the construction of a 33,000 square foot building with appropriate soil corrections was made by Ben Smith, seconded by Roger Radtke. Passed 4-0. Ken Maus abstention was due to personal interst. The HRA considered the modification of Tax Increment District 02. The Committee inquired of the possibility to include total Block 51 in the modification. City Staff advised the Committee of the State requirements for Tax Increment District Modification. With no further discussion, Chair Wiabor asked for a motion. Bud Schrupp motioned for the HRA to modify Tax Increment District 02, seconded by Ken Maus. Passed unanimously. Under other business, Olive Koropchak reported her telephone conversation with Clifford Olson, owner of Block 16, Lot 10, City of Monticello. Mr. Olson indicated the possibility of selling said (building and land) property, however, would not state a selling price but asked the City to make an offer. Ken Maus moved for an appraisal of the said property, comparable to First National Bank and Security Federal. The HRA would than decide if feasible to make Mr. Olson aan offer. Motion was seconded by Bud Schrupp. Tom Eidem suggested -3- RRA MINUTES - 11/7/85 that the RRA get an estimated cost for demolition' of buildings on said property from John Simola. Passed unanimously. Bud Schrupp moved to adjourn, seconded by Roger Redtke. Passed 5-0. Meeting adjourned. Olive M. &oropchak Executive Secretary Monticello Rousing and Redevelopment Authority C -4- MINUTES HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING Tuesday, November 12, 1985 - 4:OOPM Members present: Chair Gary Wieber, Bud Schrupp, Ren Maus, Roger Redtke, and Ben Smith Assisting as Staff Representative: Tom Eidem, City Administrator Chairperson Wisher called the HRA meeting to order at 4:3OPM. Administrator Eidem briefed the committee on the Tax Increment Financing available to Bergstad Properties. The current Nursing Rome's Market Value is listed at $715,000. The Old Assessed Value (OAV), $82,280. Two Tax Increment Finance (TIF) Options were proposed. Option A. 25 unite @ $30,000 per unit with a Captured Assessed Value (CAV) of $186,320. and Tax Increment of $15,149. Bond retirement would be $140,000 over 25 years, with purchasing price of the, Nursing Home at $100,000. Option B. 25 units @ $25,000 per unit with a Captured Assessed Value (CAV) of $143,820 and Tax Increment of $11,693. Bond retirement would be $110,000 with purchasing price of the Nursing Home at $80,000. Tom reported on his telephone conversation with John Bergstad. Mr. Bergstad still considering the project, however, felt it was to his benefit to deal directly with the Nursing Home Board for purchase of the building and land, and apply the use of Minnesota Housing Finance. Tom suggested to Mr. Bergstad because of the time element and to the HRA committee to consider the adoption of the two Resolutions and the Redevelopment Plan, therefore, asking the City Council to set two Public Hearings, November 25, 1985. This would leave the Tax Increment Finance (TIF) Option open to Mr. Bergstad for another two weeks, with a maximun cost (four to five dollars) for publication of the Public Hearing Notices. Cancellation would be prior to the November 25th City Council Meeting. Staff feels this proposal is of a highest use for a soon -to -bo vacated building. Chairperson Wisher asked for a motion. A motion was made by Bud Schrupp seconded by Roger Hedtke to adopt the Central Monticello Rodavelopment Plan Modification 02 and request the City Council to set a Public Hearing on November 25, 1985. Passed 5-0. Administrator Eidem read the Resolution approving a Tax Increment Finance District and Finance Plan and requesting the City Council to sot a Public Hearing. A motion was made by Ben Smith, seconded by Kan Maus to adopt the Proposed Tax Increment District 07. Passed 5-0. Bud Schrupp made a motion to adjourn, seconded by Roger Hodtke. Passed 5-0. Meeting adjourned. cl:ll \\ , Oliva Koropchak L Executive Secretary for the Housing and Redevelopment Authority HRA AGENDA - 12/5/85 5. OLSON PROPERTY APPRAISALS (o.k.) A. REFERENCE AND BACKGROUD At the November 7th HRA Regular Meeting, a motion was made to obtain comparable appraisal for the Clifford Olson Property, Block 16, Lot 10, City of Monticello. After such appraisals the HRA will decide if feasible to present an offer to Mr. Olson. In April, 1982, the AmericInn site (portions of Block 3) was sold for $3.00 per square foot. In June, 1983, the Security Federal site (Block 32) was sold for $2.75 per square foot. In July, 1983, the First National site (portions of Block 17) was sold for $2.43 per square foot. In 1985, Block 15 was purchased by the NRA for $2.25 per square foot for the Raindance Properties Project. Estimate to demolish the buildings (house and garage) on said property would be $5,000 - $7,000. Estimate is based on comparable demolition of Hess building (portion of Block 50) with no basement was approximately $5,000.00. Block 16, Lot 10 is 165 feet by 66 feet which equals 10,890 square feet. Land cost 10.890 X $2.60 . $28,314.00 Demolition cost 6,000.00 Project cost $34,314.00 HRA AGENDA - 12/5/85 6. CONSIDERATION OF A RESOLUTION AUTHORIZING THE EXECUTION OF A TAX INCREMENT PLEDGE AGREEMENT - RAINDANCE PROPERTIES. (o.k.) A. REFERENCE AND BACKGROUND The HRA and the Monticello City Council having adopted Tax Increment District /6, thereby, adopted the Redevelopment Agreement between the Monticello Housing and Redevelopment Authority and Ralndance Properties. On November 12, 1985, the City Council adopted a resolution authorizing the sale of Tax Increment Bonds in the amount of $350,000.00 for the Raindance Properties Project. Bond sale will take place on December 9 at 12:00 noon, with possible awarding of the sale at the Council meeting that evening, December 9, 1985, 7:3OPM. The proceeds of this bond issue will be turned over to the HRA so that they may acquire Block 15 from the City Council and Wilbur Eck so that they may construct Sixth Street and pay for all administrative, contingency, legal, and capitalized interest costs. The debt incurred by the City shall be paid by the tax increment generated from the project. A Tax Increment Pledge Agreement 1s or agreement between the City of Monticello and the Housing and Redevelopment Authority inwhich the HRA pledgee the proceeds of the tax increment to the City of Monticello for the retirement of the bond debt. The _ agreement must be executed on or before the December 9, City Council Meeting. B. ALTERNATIVE ACTIONS 1. The only alternative is to adopt the resolution authorising the execution of a Tax Increment Pledge Agreement. Without the money, the project cannot be completed. C. STAFF RECOMMENDATION Staff recommanation is evident. D. SUPPORTING DATA 1. Resolution 1985 025. 2. Resolution for Execution of the Pledgo Agreement. 3. Tax Increment Pledge Agreement. t RESOLUTION 1985 A RESOLUTION ESTABLISHING A TAX INCREMENT FINANCING REDEVELOPMENT DISTRICT 66 PURSUANT TO MINNESOTA STATUTES, SECTIONS 273.71 to 273.78 INCLUSIVE, AND ADOPTING A FINANCE PLAN FOR SAID TAX INCREMENT FINANCING DISTRICT. WHEREAS, the City Council of the City of Monticello, Minnesota has determined that it is necessary to create a tax increment financing district pursuant to Minnesota Statutes, Sections 273.71 to 273.78 inclusive, within the existing redevelopment project created pursuant to Minnesota Statutes, Section 462.411 at seg., the Municipal Housing and Redevelopment Act; and WHEREAS, the City Council of the City of Monticello. Minnesota finds that the tax increment district to be established is a redevelopment district pursuant to Minnesota Statutes, Section 273.73, Subdivision 10 and that the project will provide additional jobs, increase the tax base and prevent commerce and industry from leaving the State; and WHEREAS, the City Planning Commission has received a copy of the proposed tax increment financing plan and has been given the opportunity to review and comment upon said tax increment financing plan and the tax increment financing district; and WHEREAS, the City of Monticello has informed the members of the Local School Board of the Independent School District and the Board of Commissioners of Wright County of the fiscal and economic implications of the proposed tax increment financing district and invited said School Board members and County Commionionaro to the public hearing. WHEREAS, a public hearing was hold on October 28, 1985, at 7:30 o'clock p.m. before the City Council in the Council Chambers in the City Hall, in Monticello. Minn000ta, notice of which has been published once in the official nowopopor for the City, not leas than ton, nor more than thirty days prior to October 28, 1989; and WHEREAS, at said public hearing all persona and parties ware given full opportunity to prasont written or oral toatimony, commonto, objoctiono, ouggeotiona, and other mattoro, all of which wore duly considered by the Council; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MONTICELIA. (1) That the tax increment district to be establiahed is a redevelopment district pursuant to Minnonota Statutos, Section 273.73, Subdivision 10 and will result in increased employment in the City and in the preservation and enhancement of the tax base of the City. 0, Resolution 1985 Page 2 (2) That the proposed development vould not occur solely through private investment vithin the reasonable foreseeable future and, therefore, the use of tax increment financing is deemed necessary. (3) That the Planning Commission has revieved the tax increment financing plan and it conforms to the general plan for the development of the municipality as a whole. (4) That the proposed redevelopment involves a substantial commitment of private investment and in conjunction vith tax increments as idantified in t1-3 tar• '.ncrcm— ar.-- +.r. ••17,1. rr1 1 opportunity, consistent vith sound needs of the City for the economic development of the project by private enterprise. The City Council of the City of Monticello, Minnesota does hereby orpnovo thl tan J-'... __. .• , __ , increment financing district as described in said tax increment financing plan. Adopted by the City Council thin 12th day of November, 1985. ATTEST: Thvmou .. City Administrator C' AIv- A Cr1.-oma. Mrvnr HRA Resolution No. 1985 17 COP y RESOLUTION AUTHORIZING EXECUTION OF A TAX INCREMENT PLEDGE AGREEMENT WHEREAS, the Monticello Housing and Redevelopment Authority (the "HRA") has heretofore established Redevelopment District No. 0 (the "District"), prepared a Tax Increment Financing Plan (the "Plan") for the District, and has heretofore approved the Plant and WHEREAS, the City Council of the City of Monticello (the "City") has heretofore approved the Plan; and WHEREAS, in order to finance the District, it is necessary that the Authority enter Into a Tax Increment Pledge Agreement with the City pursuant to Minnesota Statutes, Section 273.77, securing $350,000 aggregate principal amount of General Obligation Tax Increment Bonds, Series 1985 of the City and the interest thereon, issued to finance the District and any additional bonds that may be issued to finance the District. NOW THEREFORE, BE IT RESOLVED by The Monticello Housing and Redevelopment Authority, 1. That the Chair of the HRA is hereby authorized and directed to execute the Tax Increment Pledge Agreement (the "Agreement'), on behalf of the Authority In substantially the form attached hereto as Exhbit A and Incorporated herein by reference. 2. Upon execution of the Agreement by the parties thereto, the Secretary of the Authority Is hereby directed pursuant to Minnesota Statutes, Section 273.77, to file an executed copy of the Agreement with the County Auditor of Wright County, Minnne}syota. Adopted this day of L(,64 i� •.1985. Y Attests \-Y% `fes rJ: Secretary TAX INCREMENT PLEDGE AGREEMENT by and between (� THE CITY OF MONTICELLO, MINNESOTA and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA ti THIS AGREEMENT Is made and entered Into on or as of the _ day of EiF 1985, by and between the City of Monticello, Minnesota (the "City"), and The Housing and Redevelopment Authority In and for the City of Monticello, Minnesota (the "HRA"). WHEREAS, the HRA established Redevelopment District No. 0 (the "District'), prepared the Tax Increment Financing Plan i8 (the "Plan") for the District, and approved the Plan on October 10, 1985; and WHEREAS, the City Council of the City approved the Plan on November 12, 1985; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 273.77, and Minnesota Statutes, Chapter 475, the City has agreed to finance certain public redevelopment costs to be incurred by the HRA in the District through the issuance of general obligation bonds of the City, designated the $350,000 General Obligation Tax Increment Bonds, Series 1985, and hereinafter referred to as the "Bonds"; and WHEREAS, the HRA has agreed to pledge certain tax Increment revenues to the City for the payment of the principal of and interest on the Bonds; and WHEREAS, pursuant to Minnesota Statutes, Section 273.77(x), any agreement to pledge tax Increment revenues must be made by written agreement by and between the HRA and the City and must be filed with the County Auditor of Wright Countyl NOW, THEREFORE, the City and the HRA mutually agree to the followings (1) The City will sell the Bonds. (2) The proceeds from the sale of the bonds and the earnings from the Investment of such proceeds will be made available to the HRA to pay or reimburse the HRA for public redevelopment coats paid, Incurred, or to be paid or Incurred, by the HRA In the District. (3) All tax Increment generated by the District from and after the date of this Agreement shall be deposited in a special fund (the "Project Fund") held by the HRA. The HRA hereby pledges to the payment of the principal and Interest on the Bonds, tax Increment from the Project Fund In an amount equal to 105% of the annual principal and Interest due on the Bonds. (4) Before the date of certification of City taxes In each year for collection by Wright County (such date being hereinafter referred to as the "Certification Date"), there shall be transferred from the Project Fund to 0010 the Debt Service Account maintained by the City for the payment of the L Bonds, an amount which when taken together with amounts already on deposit in the Debt Service Account, is equal to 105% of all principal and interest then due or to become due on the Bonds on the following three debt service payment dates. If, prior to any Certification Date the Project Fund contains an amount in excess of the amount to be transferred to the Debt Service Account maintained by the City for the payment of the Bonds before such Certification Date, then such excess amounts shall be available to the HRA to pay or reimburse the HRA for public redevelopment costs paid, incurred, or to be paid or incurred, by the HRA In the District. (5) Without regard to anything In this Agreement to the contrary, tax increment generated by the District shall be available to pay principal of and interest on both the Bonds and any other obligations Issued by the City. HRA or any other public body to finance public redevelopment costs paid or incurred by the HRA in the District. (6) When the entire public redevelopment costs of the District have been paid and all principal and Interest on the Bonds and other obligations issued to finance the public redevelopment costs of the District have been paid, and the City has been reimbursed from collections of tax Increment from the Project for collections of general ad valorem taxes used to pay principal of and interest on the Bonds, then the HRA shall report such fact to the City Council of the City and the HRA shall submit a final statement of such payments. Upon audit of this statement and approval thereof by the City Council, the payment of the expenditures of the HRA in the Project shall be reported to the County Auditor of Wright County. (7) An Executed copy of this Agreement shall be filed with the County Auditor of Wright County pursuant to the requirement contained In Minnesota Statutes, Section 273.77(a). t IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly executed on their behalf and their seals to be hereunto affixed and such signatures and seals to be attested, as of the day and year first above written. ATTEST Clerk-AdiblilUtrator . CITY OF MONTICELLO ey Mayor (SEAL) ATTEST: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY �OF �MO�NTIICELLLO, MINNESOTA Secretary Chairman EXTRACT OF MINUTES OF MEETING OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA HELD: December 5, 1985 Pursuant to due call and notice thereof, a regular meeting of The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota was duly held in the City of Monticello on the 5th day of December, 1985. The following members were present: Bud Schrupp, Ken Maus, Roger Hedtke, and Ben Smith. Staff: Tom Eidem and Olive M. Koropchak and the following were absent: Gary Hieber Member Ben Smith introduced the following resolution and moved its adoption: RESOLUTION NO. 1985 • 7 RESOLUTION AUTHORIZING EXECUTION OF A TAX INCREMENT PLEDGE AGREEMENT (For body of Resolution Goo Exhibit A attached hereto.) The motion for the adoption of the foregoing resolution wan duly seconded by Member Roller Hedtke and upon vote being taken thereon, the following voted in favor thereof: Ben Smith, Roger Hedtke, and Bud Schrupp. and the following voted against the same: Nona Abstention: Kan Maus Whereupon said resolution was declared duly passed and adopted. � Clio STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF MONTICELLO I. the undersigned, being the duly qualified and acting Secretary of The Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority"), DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a meeting of the Authority held on the date therein indicated, which are complete transcript therefrom insofar as the same relates to the resolution authorizing the execution of the Tax Increment Fledge Agreement with the City of Monticello. WITNESS my hand as ouch Secretary and the official seal of the Authority a this 5th day of December , 1985. < Secretary A MICROFILM TITLE PAGE CITY OF MONTICELLO Housing & Redevelopment Authority (HRA) Agenda Books 1986