HRA Agenda 04-20-1987MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Friday, April 3, 1987 - 9:OOAM
Monticello Council Chamber
Members Present: Acting Chairperson Bud Schrupp, Ken Maus,
Ben Smith, and Al Larson.
Members Absent: Marlys Erickson.
1. Call To Order.
Acting Chairperson Bud Schrupp call the HRA meeting to order
at 9:04AM.
2. Approval of the February 4, 1987 HRA Minutes.
Ken Maus motioned to approve the February 4, 1987 HRA
Minutes, Ben Smith seconded the motion. Minutes stand
approved.
3. Public Hearing on the Dispositon of Public Land for
Construction Five Tax Increment District 05.
Acting Chair Bud Schrupp opened the hearing for comment
from the publics however, with no publication of notice
in the newspaper the hearing will remain open until Monday,
April 20, 1987, 9:00 AM to allow for proper publication
notice.
4. Consideration of the HRA to Execute a Quit Claim Deed
for Construction Five Tax Increment District 05.
Koropchak reiterated the reason for a Quit Claim Deed,
although Construction Five has possession of the land.
The HRA acquiree and reconveys the land to Construction
Five for security reasons and for the County Assessor
to legally assign a market value to the property. Ken
Maus explained the uniquiness of the property which
would constitute a hardship to a developer for the coat
of public improvements. This the reason for creation
of Tax Increment District 05. Al Larson questioned the
need for more apartments in the City of Monticello.
Koropchak explained the 402 ratio for apartments under
the City Zoning Ordinance. Ken Maus motioned to adopt
the execution of a Quit Claim Deed for Construction
Five Tax Increment District 05, with the provision, that
no public contentment will be hoard at the April 20
public hearing. Seconded by Al Larson, and passed 4-0.
5. Consideration of Concept APeroval and the Use of Tax
Increment Financing for NAWCO Minnesota[ Inc.
After a short discussion of the proposed Tax Increment
District 07 for NAWCO Minnesota, Inc., Kon Maus
further stated the purpose of TIP for economic development
and his view of a very high quality product produced by
the this company. Ban Smith motioned to approve the
concept and the use of Tex Increment Financing for NAWCO
RRA Minutes - 4/3/87
Minnesota, Inc. gen Maus seconded the motion and passed 4-0.
6. Other Business.
Acting Chairperson Bud Schrupp having welcomed Al Larson
to the MRA, he excused himself from the meeting and gen
Maus proceeded to preside. Other properties discussed
were IBI Complex, Data Card, Key Tool 6 Plastics, and the
Post Office. What and when in the future potential for
door-to-door mail delivery in Monticello? Is a public
hearing necessary for the sale of the Old Fire Ball?
These were questions raised and to be answered.
7. Adjournment.
Ben Smith motioned to adjourn the BIW meeting, Al Larson
seconded the motion. Meeting adjourned at 9:45AM.
Olive M. goropchak, Executive Secretary
Monticello Mousing and Redevelopment Authority
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HRA Agenda - 4/.20/87
3. PUBLIC HEARING ON THE DISPOSITION OF PUBLIC LAND FOR
CONSTRUCTION FIVE TAX INCREMENT DISTRICT #5.
A. REFERENCE AND BACKGROUND.
Construction Five started preliminary construction on the
proposed 24 -unit apartment building and 30 -unit apartment
building on April 1, 1987. Legal property description:
Lots 1-5, Block 1, Construction Five Addition, City of
Monticello. The HRA adopted the Tax Increment District i5
Development Agreement with Construction Five on February 4,
1987. At the March 23, 1987, City Council meeting, the
council accepted the low bid from S b L Excavating for the
construction of public improvements in Construction Five
Subdivision. Due to the low bid, the budget for the Tax
Increment Financing project was reduced from $530,000.00 to
$365,000.00. The City Council adopted a resolution netting
the sale of Tax Increment Finance Bonds for Improvements
in the Construction Five Addition. Jerry Shannon, Springsted,
Inc., recommended the sale of a $365,000.00 G.O. Tax
Increment Bonds. The final bond bids for the award of
sale is scheduled for the April 27, 1987 City Council
meeting. Public improvements for the said project include
water and sewer, streets, curb and gutter along Lauring
Lane, Fallon Drive, and Washington Street.
Upon the advice of Mr. Bob Deike, Development Agreement
Attorney for Holmes b Graven, the HRA should execute a
e Quit Claim Dead for the acquisition and reconvoyance of
Lot 1-5, Block 1, Construction Five Addition, City of
Monticello to Construction Five. This a security measure
for the HRA. The Quit Claim Deed's provision states that
Construction Five cannot sell the said above property
during the construction period and that construction of
the two proposed said apartment buildings will be
completed in 1987. Second, the Minnesota Statutory states
that before a market value can legally be assigned to
said land and improvmente by the County Assessor, a Quit
Claim Deed need be executed between the "Grantor" and the
"Grantee". The consideration of One Dollar ($1.00) hereby
will acknowledge the acquistion and reconveyance of said
property from the HRA to Construction Five. The County Assessor
assigned a 1.5 million dollar market value to the said
land and improvments. According to Minnesota Statutory a
public hearing must be hold on the disposition of public
land. This being the purpose for the said public hearing.
The public hearing opened on April J. ad/, and remained
open due to no publication notice in the newspaper. The
notice having appeared in the newspaper (sea enclosure),
testimony may be accepted, thereafter, the public hearing
closed. Being a public hearing, there really are no
alternative actions.
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HRA Agenda - 4/20/87
4. CONSIDERATION OF THE HRA TO EXECUTE A gUIT CLAIM DEED
FOR CONSTRUCITON FIVE TAX INCREMENT DISTRICT 05.
A. REFERENCE AND BACKGROUND.
With the continuation of the public hearing from April 3,
1987 and with the assumption of no conteetment and, therefore,
the hearing closed; I suggest the HRA amend the motion of
April 3, 1987. This for the purpose to clean house, a new
motion with a current date without any stated provisions.
The April 3, 1987 motion was to adopt the execution of a
Quit Claim Deed for Construction Five Tax Increment District
/5, with the provision, that no pulbic conteetment will be
heard at the April 20 public hearing. Necessary reference
and background information was provided with the public hearing
supplement. City staff recommends the following.
B. ALTERNATIVE ACTIONS.
1. The HRA adopt the execution of a Quit Claim Deed between
the HRA and Construction Five.
2. The NRA not adopt the execution of a Quit Claim Deed
between the HRA and Construction Five.
C. STAFF RECONMMENDATION.
City Staff recommends the HRA adopt the execution of a Quit
Claim Deed.
D. SUPPORTING DATA.
A copy of the Quit Claim Deed was provided with the April 3
agenda.
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HRA Agenda - 4/20/87
+ 5. CONSIDERATION OF A RESOLUTION AUTHORIZING THE EXECUTION
OF A TAX INCREMENT PLEDGE AGREEMENT FOR CONSTRUCTION FIVE.
A. REFERENCE AND BACKGROUND.
The HRA and the Monticello City Council having adopted Tax
Increment District 95, thereby, adopted the Redevelopment
Agreement between the Monticello Housing and Redevelopment
Authority and Construction Five. On March 23, 1987, the
City Council adopted a resolution authorizing the sale
of Tax Increment Bonds in the amount of $365,000.00 for
the Construction Five Project. Bide will be received
at the Council meeting the evening of April 27, 1987,
7:3OPM. The proceeds of this bond issue will be turned
over to the HRA for public improvements along Lauring
Lane, Washington Street, and Fallon Drive and for payment
of all administrative, contingency, legal, and capitalized
Interest coats. The debt incurred by the City shall be
paid by the tax increment generated from the project.
A Tax Increment Pledge Agreement is an agreement between
the City of Monticello and the Housing and Redevleopment
Authority inwhich the HRA pledges the proceeds of the tax
Increment to the City of Monticello for the retirement
of the bond debt. The agreement must be executed before
the bonds are awarded.
B. ALTERNATIVE ACTIONS.
1. The only alternative is to adopt the resolution author-
izing the execution of a Tax Increment Pledge .Agreement.
Without the money, the project cannot be completed.
C. STAFF RECOMMENDATION.
Staff recommendation is stated above.
D. SUPPORTING DATA.
1. Resolution 87-4.
2. Resolution for Execution of the Pledge Agreement.
3. Tax Increment Pledge Agreement.
RESOLUTION 87-4
A RESOLUTION ADOPTING A MODIFICATION OF AN
EXISTING TAX INCREMENT FINANCING REDEVELOPMENT
DISTRICT PURSUANT TO THE PROVISIONS OF
SECTION 273.71 TO 273.78 INCLUSIVE OF THE
MINNESOTA STATUTES AND AMENDING THE FINANCING PLAN
FOR SAID TAX INCREMENT FINANCING DISTRICT
WHEREAS, the City Council of the City of Monticello. Minnesota,
has determined the need to modify the finance plan of an existing
tax increment financing district pursuant to Minnesota Statutes,
Section 273.71 to 273.78 inclusive, within the redevelopment project
modification area created pursuant to Minnesota Statutes, Chapter
462.411 at seg.; and
WHEREAS, the City Council of the City of Monticello. Minnesota,
found in 1982 that the tax increment financing district to be modified
was an economic development district pursuant to Minnesota Statutes,
Section 273.73, Subdivision 12; and
WHEREAS, the proposed modification to the finance plan will
result in the preservation and enhancement of the tax base of the
City; and
WHEREAS, the Planning Commission has reviewed the proposed modification
e of the tax increment financing district; and
WHEREAS, the members of the School Board of Education of the
Local Independent School District 0882 and the Board of Commiesionore
of the County of Wright have boon informed of the fiscal and economic
implications of the proposed tax increment financing redevelopment
district modification; and
WHEREAS, a public hearing was hold on January 26, 1987, at
7:30 o -clock p.m. before the City Council in the Council Chambers
in the City Hall, in Monticello, Minnesota, notice of which has boon
published once in the official nowopapor for the City, not leen than
ton, nor more than thirty days prior to January 26, 1987; and
WHEREAS, at said public hearing all persons and portion were
given full opportunity to present written or oral tootimony, comments,
objoctiono, ouggoationo, and other matters, all of which were duly
considered by the Council;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF MONTICELLO that the City of Monticello does hereby modify the
existing tax increment financing redevelopment district, and amond
the financing plan for said modified tax increment financing economic
development district and finds:
Resolution 87- 4
Page 2
1. That the tax increment financing district as modified herein
is a tax increment financing redevelopment district since
the construction of the 24 and 30 unit apartment structures
will increase the assessed value and thus preserve and enhance
the tax base of the City, and will allow the recovery and
rehabilitation of blighted and unsuitable lands.
2. That the proposed redevelopment within the tax increment
financing district as modified herein would not have reasonably
been expected to occur solely through private investment
because, in the opinion of the City, the cost associated
with land reclamation and public improvements would be prohibitive.
3. That the Planning Commission has reviewed the tax increment
financing plan as modified herein and it conforms to the
general plan for the development of the municipality as
a whole because it will result in an increase in the City -s
commercial and housing activity.
4. That the tax increment financing plan as modified herein
will afford maximum opportunity consistent with the sound
needs of the City as a whole, for the development by private
enterprise as it will enable the City to assist the developer
with the construction of two multiple housing structures
by providing a suitable site for development.
The City Council of the City of Monticello, Minnesota, does
hereby approve the modification Y1 to the Tax increment District A5
and financing plan.
Adopted by the City Council this 9th day of February. 1987.
Arva A. Crimemo, Mayor
Q
Ii
Thomas A. Bidsm
City Administrator
HRA
Resolution No. 87 -
RESOLUTION AUTHORIZING EXECUTION
OF A TAX INCREMENT PLEDGE AGREEMENT
WHEREAS, the Monticello Housing and Redevelopment Authority
(the "HRA") has heretofore established Redevelopment District No. 5
(the "District"), prepared a Tax Increment Financing Plan (the "Plan")
for the District, and has heretofore approved the Plan; 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 473.77, securing $365,000
aggregate principal amount of General Obligation Tax Increment Bonds,
Series 1987A 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 oxeeute the Tax Incremont Pledge Agreement (the 'Agreement"),
on behalf of the Authority in substantially the form attached hereto
as Exhibit A and incorporated herein by reference.
4. Upon execution of the Agreement by the parties thereto,
the Secretary of the Authority is hereby directed pursuant to Minnesota
Statutes, Section 473.77, to file an oxecuted copy of the Agreement
with the County Auditor of Wright County, Minnesota.
Adopted this day of , 1987.
Attoett
secretary
Chair
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
THIS AGREEMENT is made and entered into on or as of the day
of , 1987, 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. 5 (the
"District"), prepared the Tax Increment Financing Plan No. 5 (the
"Plan") for the District, and approved the Plan on January 7, 1987;
and
WHEREAS, the City Council of the City approved the Plan on
February 9, 1987; 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 costa to be incurred
by the HRA in the District through the Issuance of general obligation
bonds of the City, designated the $365,000 General Obligation Tax
Increment Bonds, Series 1987A, 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 interact
on the Bonds; and
WHEREAS, pursuant to Minnesota Statutes, Section 273.77(a),
any agreement to pledge tax increment rovenuao must be made by written
agreement by and between the HRA and the City and must be filed with
the County Auditor of Wright County;
NOW, THEREFORE, the City and the HRA mutually agree to the following:
(1) The City will sell the Sonde.
(2) The proceeds from the sale of the bonds and the earnings
from the investment of ouch proceeds will be made available
to the HRA to pay or reimburse tho HRA for public redevelopment
costa 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 Pund") held by the HRA. The HRA hereby
pledgee 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.
Tax Increment Pledge Agreement
Page 2
(a) 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 the Debt Service Account
maintained by the City for the payment of the 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 coats 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 costa of the District
have boon 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 collection 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 ouch fact to the City Council of the
City and the HRA shall submit a final statement of such
payments. Iron audit of this statement and approval thereof
by the City Council, the payment of the expenditures of
the NRA in the Project shall be reported to the County
Auditor of Wright County.
(7) An Executed copy of this Agreement ohall be filed with
the County Auditor of Wright County pursuant to the requirement
contained in Hinnosota Statuteo, Section 273.77(x).
Tax Increment Pledge Agreement
Page 3
IN WITNESS WHEREOF, the City and the NRA 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: CITY OF MONTICELLO
BY
Clerk-Adminictrator Mayor
(SEAL)
ATTEST: THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF MONTICELLO. MINNESOTA
Secretary Chairmen