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HRA Agenda 07-01-1987AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, July 1, 1987 — 7:OOAM City Hall Members: Acting Chairperson Bud Schrupp, Ren Maus, Ben Smith, and Al Larson. 1. Call to Order. 2. Approval of the June 17, 1987 NRA Minutes. 3. Consideration to Adopt the Tax Increment District !7 Pledge Agreement between the BRA and the City of Monticello. 4. Review of the HRA Offer of the Old Monticello Ford Property. S. Consideration of Information and Comment on the Directors of Monticello Development. 6. Consideration of Nominees for HRA Membership. 7. Other Business. j 8. Adjournment. IL I MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, June 17, 1987 - 7:OOAM City Hall 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 called the HRA meeting to order at 7:08AM. 2. Approval of the May 13 and May 20, 1987 HRA Minutes. Ben Smith made a motion to approve the May 13 and Nay 20, 1987 HRA minutes. Seconded by Al Larson and passed 3-0. Abstention by Ken Maus, not present at the May 20th meeting. 3. Consideration for the HRA to Adopt the Development Agreement for NAWCO Minnesota, Inc. Koropchak asked for the approval of the HRA on the purchase agreement contingency's date which had been initialed by Dale Lungwitz, change from June 8 to June 22, 1987 because the date for the award of the bond sale had been postponed. Ken Maus made a motion to accept the contingency date change on the purchase agreements, seconded by Ben Smith, and passed 4-0. With NAWCO Minnesota, Inc. prepared to sign the construction contract with Winkelman Building Corporation and the minimun market value with improvements on Lots 11 and 12. Block 2, Oakwood Industrial Park, City of Monticello being assigned at $865,000 by the county assessor, Ken Maus made a motion to adopt the Development Agreement, seconded by Al Larson and passed 4-0. 4. Consideration of Letters of Resignation. It was a consensus of the HRA to accept the resignations from Administrator Tom Eidem and from HRA member Marlys Erickson. The committoo will bring suggested names to the next meeting. Bob Wyman's name was suggested as a possible HRA member. 5. Consideration to Review the Proposed Flake Prolect. Koropchak presented the appraisal completed by St. Cloud Appraisals on May 26, 1987, the estimated market value is $67,000.00. Bon Smith made a motion to present a written offer of $67,000 to Larry r Flake, accompanied with a letter stating the comparable estimated market value of six or eight years ago plus taxes and assessments paid and incentives of selling price plus interest on contract for dead or on investment of money. Plane are for the HRA to finance the project by the use of the HRA general funds for the down payment, HRA Minutes - 6/17/87 demolition cost, and city contingencies. Payment of contract for deed or repayment of loan plus interest by the generated increment of the elderly housing project in Tax Increment District /2. The motion was seconded by Ken Maus and passed 4-0. 6. Other Business. Koropchak updated the BRA on the streetecape project, stating the downtown merchants were concerned about the progress of the plan. Base maps having been authorized by the City Council on June 8 and the design plan to follow. Jim Ridgeway willing to spearhead a committee to promote the streetscape project was discussed among the planning commission. 7. Adjournment. Ben Smith made a motion to adjourn, seconded by Ken Maus. Meeting adjourned. Following the meeting a discussion of why the property valuations rose so rapidly was addressed and the concern of Monticello's image for business if this were identified as such. Is the City Councils action of a city assessor something to be revaluated? The HRA asked Koropchak to survey the industries of their property valuation concerns. Q,,:,i 'WN. X&, of, d Olive M. Koropchak, Executive Secretary Mont icelloHousing and Redevelopment Authority HRA Agenda - 7/1/87 3. CONSIDERATION TO ADOPT THE TAR INCREMENT DISTRICT 07 PLEDGE AGREEMENT BETWEEN THE HRA AND THE CITY OF MONTICELLO. A. REFERENCE AND BACRGOUND. As we have done with all other tax increment districts, it is essential to adopt and execute a pledge agreement between the HRA and the City of Monticello. The pledge agreement whereby states that the HRA is pledging 100% percent of the increment they collect to the City for the retirement of these bonds. Bond issuance of $155,000.00. B. ALTERNATIVE ACTIONS. 1. To adopt and execute the pledge agreement. 2. To deny adoption and execution of the pledge agreement. C. STAFF RECOMMENDATION. Staff recommends the pledge agreement be adopted and executed. D. SUPPORTING DATA. Copy of a resolution authorizing the execution of the pledge agreement. HRA RESOLUTION NO. 1987- 3 RESOLUTION AUTHORIZING EXECUTION OF A TAX INCREMENT PLEDGE AGREEMENT WHEREAS, the Monticello Housing and Redevelopment Authority (the "HRA") has heretofore established Economic District No. 7 (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 273.77, securing $155,000 aggregate principal amount of General Obligation Tax Increment Bonds, Series 19878 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 Choir 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 Exhibit 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, Minnesota. Adopted this day of , 1987. Chair Attest: Secretary HRA Agenda — 7/1/87 4. REVIEW OF THE HRA OFFER OF THE OLD MONTICELLO FORD PROPERTY. A. REFERENCE AND BACKGROUND. At the lest HRA meeting, the members voted to offer Larry Flake, $67.000.00, (estimated market value) for the property located at 249 West Broadway. A purchase agreement, a cover letter, and a payment schedule was mailed June 27, 1987. At this time, I have heard no response. I'm prepared to counter offer up to $75,000.00. No action is needed of this agenda item. (See Supporting Data.) 5. CONSIDERATION OF INFORMATION AND COMMENT ON THE DIRECTORS OF MONIICELLO DEVELOPMENT. A. REFERENCE AND BACKGROUND. The supporting data of the organizational structure of the Directors of Monticello Development was presented by Mayor Grimamo at the City Council meeting June 22, 1987. The City Council took no action and tabled the item until the July 13 Council meeting. The Council directed myself to clarify the DMD's authority and objectives, and to ask for comments of the DMD from the city commissiono and committees. The DMD'a organizational structure is being *reviewed by the city attorney. Although, my name appears as secretary. I did not contribute input Into the organization of the DMD. Beings this is a discussion item, no formal action is necessary; however, the NRA comments will be reported to the City Council. (See Supporting Data.) City 0/ Monticello MONTICELLO, MN 55362.9248 June 26, 1987 Phma. 9121295•27n Metro Ie 121333.3739 Mayor AM Crhwoo City Council: Mr. Larry Flake Dan 302 Sweet Briar Lane Fran Far wiume Far Hopkins, MN 55343 Jack Maxwell Dear Mr. Flake: Amroroso-amr: As per our previous conversations, the Monticello Housing Tom EIOem and Redevelopment Authority has expressed an interest in Rkk your property located at 249 West Broadway, Monticello, amm wors: Minnesota. Enclosed is a Purchase agreement stating Jdn sancta an offer of sixty-seven thousand dollars and no cents Pkmnap a2or*v: (;67,000.00), the estimated market value of the said Gary Anoarson property. Mr. Mike Amo, Associate Appraiser, St. Cloud Ecorw Devebomenc Osa Koraoeeak Appraisal, Inc., St. Cloud, Minnesota, appraised the property on May 26, 1987. The appraisal report is available for your review upon your request. Mr. Flake, if you consider the $25,000.00 down payment plus a 52 interest rate investment over 33 years; the accumulated interest at 10% over 31 years on the $42,000.00 contract for deed; and the savings of no tax and assessment payments for the same time period the estimated benefit to you is approximately $85,000.00. The estimated market value of the March 1980 appraisal was $70,000.00. Please consider the HRA offer. If you have further questions, please contact me at (Metro) 333-5739 or (612) 295-2711. Mr. Flake, Monticello is very fortunate to have a person as yourself who previously and who continues to show an interest in it's future growth and development. Sincerely, CY" � . KeloC� Olive M. Roropchak Economic Development Director Enclosure cc: HRA Filo on Eau 9rS01 *tkt MmntlCaem, HaWAwses SM2.9246 PAYMENT SCHEDULE Monticello Ford, Inc. (Lawrence Flake) Contract for Deed Amount: ;42,000.00 Interest Rate: 10% Term: 3.5 years AMOUNT PRINCIPLE INTEREST PAYMENT DATE $42,000.00 $6,000.00 ;2,100.00 $8,100.00 June 30, 1988 36,000.00 6,000.00 1,800.00 7,800.00 December 31, 1988 30,000.00 6,000.00 11500.00 7,500.00 June 30, 1989 24,000.00 6,000.00 1,200.00 7,200.00 December 31, 1989 18,000.00 6,000.00 900.00 6,900.00 June 30, 1990 12,000.00 6,000.00 600.00 6,600.00 December 31. 1990 6,000.00 6,000.00 300.00 6,300.00 June 30, 1991 ' Directors of Monticello Development (DMD) - Jim Ridgeway Con Johnson, Chairman 011ie Koropchak, Secretary Mission - Consolidation and condusiveness of commercial development for the Monticello business district. Authority - Appointed by Mayor and City Council Report directly to Mayor and Council All city appointed development committees and commissions eport to DMD. City facilities and consultants shall be at DMD's disposal. Objectives - 1. Enhance the business and commercial development of Monticello. 2. Attracting new commercial development. 3. Insuring that all committees and commissions are consistant with D.M.D. Meetings - At discretion of directors. Communication - Directed to 011ie Koropchak, Secretary. Recommendations - Directors shall receive no renumeration, but shall have a contingency fund of $1,000.00 at it's disposal and accountable to Council.