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HRA Agenda 05-06-1992y AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, May 6, 1992 - 7:00 PM City Hall MEMBERS: Chairperson Al Larson, Ben Smith, Lowell Schrupp, Everette Ellison, and Tom St. Hilaire. STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Koropchak. GUEST: Floyd Kruse. 1. CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE APRIL 23, 1992 HRA MINUTES. 3. CONSIDERATION TO HEAR KRUSE COUNTER-OFFER. 6. OTHER BUSINESS. 5. ADJOURNMENT. I MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Thursday, April 23, 1992 - 7:OOPM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Smith, Lowell Schrupp, Everette Ellison, and Tom St. Hilaire. STAFF PRESENT: Jeff O'Neill and 011ie Koropchak. STAFF ABSENT: Rick Wolfsteller. 1. CALL TO ORDER. Chairperson Larson called the HRA meeting to order at 7:00 PM. 2. CONSIDERATION TO APPROVE THE MARCH 11, 1992 HRA MINUTES. Lowell Schrupp made a motion to approve the March 11, 1992 HRA minutes, seconded by Everette Ellison and with no additions or corrections the minutes were approved as written. 3. CONSIDERATION TO ACKNOWLEDGE HRIi RESOLUTIQH �►ND 11R. SCHEREg'S LETTER, AND TO HEAR PRELIMINARY RECOMMENDATION FOR TIF DISTRICT FOR POST OFFICE EXPANSION. The HRA members acknowledged the resolution drafted under HRA direction and submitted to Dr. Ehlen. Koropchak reported in a telephone conversation with Carl Larson, Real Estate Personnel for the Federal Government, he indicated a three and one-half hour meeting was held between parties; however, the parties were unable to negotiate a one year lease. The Post Office has no contract and needs a building this year. Koropchak informed the members that Mr. Pelstring, BDS Inc., and herself toured the current Redevelopment District 02 site and those sites earmarked by the HRA for potential redevelopment of cottage homes. It Is Mr. Peletring'e suggestion that the District 02 Plan not be modified to enlarge the boundaries but to created a new Renovation District of fifteen years. 4. CO,N.yIDEJ{ATJON TO }#EAP; UCOMXNDATTON 6ND PLSCUSS PLANS FOR DEVELOPMENT OF THE COTTEGE HOME HOUSING CONCEPT, Koropchak reviewed the information outlined in the agenda supplement regarding Duane Schultz's reference of Prestige Builders and who developed McCarland Plaza. Jeff O'Neill showed a video of the northerly Block 84 site, highlighting the Kruse property destroyed by fire and now HRA MINUTES 4-23-92 demolished. He informed members of his previous conversations with Mr. Kruse: Ed Kruse wants to rebuild on the property and the original request for a variance was an error. Therefore, if the HRA is interested in this site, they should first commit to the site, and than look either to stall the Kruse's or to purchase. Mr. O'Neill said he thought the Kruse's asking price was about $30,000 as they are looking for a replacement lot in the city. Tom St. Hilaire informed the HRA members that lots in his neigborhood (Mississippi Drive) which are larger, on the river, and have water and sewer sold for $22,000. Mr. St. Hilaire projects if the HRA commits to the redevelopment of northerly Block 54 that development would not take place for at least five years. Koropchak reminded HRA members if the HRA purchases property, the seller may be entitled relocation costs by law. Total estimated increment of seven cottege homes ($150,000 EMV each) over 15 years at the maximum is $80,000 - $100,000. The HRA members agreed on the concept and need for upscale cottege housing, one floor, and close to downtown. Additionally, they agreed on the need to eliminate substandard property and the desire not to be landowners. Mr. O'Neill gave the HRA a worst case scenario, if the HRA purchased the property for $30,000 their greatest loss would be the difference between the purchase and selling price. The HRA agreed with Mr. O'Nei ll's scenario; however, they saw $20,000 as a fair and equal price and felt It was within reason to reduce the offer thereafter by $500 per month commencing in July (example: $19,500). Additionally, the HRA recognizes they have other optional redevelopment sites. Tom St. Hilaire made a motion authorizing Jeff O'Neill and Koropchak to submit a firm HRA purchase offer of $20,000 maximum for the Kruse property. Ben Smith seconded the motion and with no further discussion the motion passed unanimously. a• C4�'%P Due to the increase of property taxes, Chairperson Larson felt 1 ,r'.►a greater need for the HRA to search for a local qualified �� --ssiideveIoper/ J.,,=ti.l. ,.•_ J .. i but in no way to substitute '+�.0 Fquality. e 5. CONSIPFRASION gg aVIEW ff2 pXs_cosS JyE J L9 P;b Ypg3ANCE RgoUEST AS IT RELATES TO RELOCATION OR SOIL CORRECTION COSTS, Jeff O'Neill informed the HRA that this concept began when Bill Aydt (J M 011) inquired of the potential to build a storage building at theirPpgeodnt Fifth Street site. To meet City code a principal use variance (office and bath) and hard surface is needed, Therefore, on April 7th a meeting was celled to define the problems associated with the operation and expansion of the bulk tanks on the Burlington Northern HRA MINUTES 6-23-92 property located between 5th Street and the railroad tracks, and to begin to develop a plan for establishing a long-term site for bulk tank storage in Monticello. The conclusion was the need to include Northern Burlington personnel in the process, to establish a clear definition of the pollution problem and soil testing costs, and to table the variance request of J M 011. A second meeting was held April 16th as a followup to the previous meeting. Northern Burlington officals were brought up to date, Jim Moores reported the J M Oil tanks were registered with the MPCA, Jeff Michaelis reported the Riverside 011 tanks were not registered until last week and he thought the former Nelson tanks were not registered, and O'Neill reviewed the cost estimates to determine extent of site pollution. The next meeting to be scheduled in a few weeks would develop a relocation plan, tank owners are to determine estimated costs for tank relocation within one mile, and staff is to work with the HRA to find suitable and affordable land in the industrial park or the potential to trade lands with BN. Koropchak noted that unless the substandard Blocks of 9, 10, and 11 were included in a TIF District the oil tank properties would not qualify for the establishment of a TIF District. The creation an Economic District in the industrial park is possible; however, until building construction concepts are determined, projected increment can not be estimated. Oil tanks do not generate increment therefore increment generated by the project would be minimum. O'Neill informed the HRA if 5th Street were vacated there is the potential for multi -residential and commerical development or for green space. This concept would fit well with Sunny Fresh's improvements. Everette Ellison recalled the history of the area and noted the problems with the Henson property well when the city's sewer interceptor was installed. The HRA took no action. Inorder to avoid any conflict of Interest in the future, Tom St Hilaire went on record by otating he felt the City should stay clear of broken proportles and should wait until the broken Is fixed. 6. CONSIeERAZION TQ R9V.FW ILNB $ISCUSS THE TANK REMOVAL AND CLEAN UP REQ EST FOR PROPOSAL BIDS. The NRA reviewed the enclosed bids from Oermundsen Companies, Inc. and Schluender ConoPepetbon, and briefly discussed the opinions of Service West Construction and Determan welding a Tank Service regarding the Qille property. HRA MINUTES /-23-92 In addition, Koropchak updated the IIRA of her conversation with the County Assistant Attorney. Iie said the MPCA will only complete an Environmental Report if there is evident of possible contamination. Secondly, he said the State is the owner of the property and County holds the property In -trust; therefore, permission to enter the Gille grounds is granted by the County Auditor or himself. Lastly, he would investigate the potential of squatters on the premise. With the above information provided, Al Larson made a motion for the HRA to disembark from the Gille property therebye entrusting full responsibility to the County and State. The motion was seconded by Tom St. Hilaire and without further discussion the motion passed unanimously. CONSIDERATION TO ELECT 1992 HRA OFFICERS. Everette Ellison made a motion to cease floor nominations and to elect Al Larson, Chairperson and Ben Smith, Vice Chairperson of the Monticello Housing and Redevelopment Authority. The motion was seconded by Tom St. Hilaire and without further discussion the motion passed unanimously. OTHER BUSINESS. a) The HRA accepted the billing from BDS, Inc. for the period of February 17 through March 15. b) Aroplax Corporation - Koropchak informed the HRA that the City has a Letter of Intent executed by Mr. Jerry Schoen. The Letter of Intent states a 180 day commitment to a Monticello location and if the company withdraws a penalty of $5,000 is due. The funding application process will be reinstated with applications to a bank, the State, Central Minnesota Initiative Fund, and the EUA. C) Modern Molding, Inc. - Koropchak informed the HRA of a Long Lake plastic injection molding and tool & die maker interested in Monticello. Having toured Monticello and meeting with IDC representatives and Pat Pelstring, the company was very impressed with Monticello. A site location decision is expected around the first of May, competition is between Monticello and Buffalo. The project Includes a top quality 20,000 aq ft facility with current employment of 21-22 and projected at 28+. According to Mr. Peletring the company appears financially sound. Total project costs are estimated at Page 4 HRA MINUTES 4-23-92 $800,000 with anticipated sources from the bank, State, CMIF, TIP, and QMEP. Projected TIP is $70,000 to $80,000. The company interested in the HRA lot, Koropchak asked for a selling price. Inorder for a liability to become an asset through the creation of jobs and taxes, the HRA responsed $1.00 out -right. TIP was suggested Inorder for the HRA to collect some of its debt. The HRA agreed upon an asking price of $50,000 for the land with site Improvements not to exceed $20,000. The HRA gave preliminary concept approval for use of TIP. d) Remmele Engineering - The HRA was informed of Remmele's expansion plans for 10,000 sq ft with the potential of 10 new jobs. Additionally, the HRA was informed of the possibility for Remmele to install a sprinkler system throughout the entire facility. Remmele isn't in favor of this because water is more damaging to their machinery than fire. No other Remmele facility has been required to install sprinklers. Because of Remmele's grade of building construction and occupancy, State Building Codes seem to indicate the need for sprinklers. A meeting is scheduled for next week between Remmele officials, city staff, and a State Building Code Monitor to review codes, outline options, and to determine the beat solution. ADJOURNMENT. The HRA meeting adjourned at 8:45 PM. 011ie �K r pcha HRA2 tf iVe Director Page 5 (it 250 East Broadway P. O. Box 1147 Monticello, MN 55362-9245 MEMO Phone: (612) 295.2711 Metro: (612) 333-5739 Fax: (612) 295.4404 TO: Bill Aydt, Jim Moores, Jeff Michaelis, Pat Tracy, Bruce Opp of Burlington Northern, Rick Wolfsteller, John Simola, 011ie Koropchak, and Ken Maus TT FROM: Jeff O'Neill, Assistant Administratop�.tJ DATE: April 7, 1992 This memo is a summary of the meeting called by City staff and conducted on April 1, 1992. The meeting was attended by City staff, including myself, 011ie Koropchak, and John Sisola, along with bulk tank operators Bill Aydt, Jim Moores (J.M. Oil), and Jeff Michaelis (Riverside Oil). The main purpose of the meeting was to bring clearer definition to problems associated with the operation and expansion of the bulk tanks on Burlington Northern property located between 5th Street and the railroad tracks. Another purpose of the meeting was to begin development of a plan for establishing a long-term site for bulk tank storage in Monticello. Following are items that were discussed at the meeting: 1. All agreed that it is likely that there is some contamination at the site. The extent of the problem is not known. 2. None of the tanks appear to meet existing PCA codes pertaining to provision of proper spill containment areae. 3. The owners/operators were not sure if the tanks are registered as required by the PCA. 4. Money from the petro -fund for cleanup Is available; however, the petro -fund contribution may be decreased if the owner/ operator has unregistered tanks or is uncooperative with the PCA. 5. City staff indicated that it would be unlikely that any Improvements would be allowed at the site, including development of a storage garage, until the pollution problem is remedied. Memo April 7, 1992 Page 2 6. City code currently requires that the bulk tank storage site meet all codes prior to upgrades being allowed. The site would, therefore, need a principal use (office), hard surface drive areas, etc. 7. Operators indicated a willingness to meet all codes; however, they expressed the need to phase in some code related improvements over time due to financial constraints. 8. The group discussed relative benefits to all involved with the potential relocation of the bulk tanks to the industrial park area. Additional information needs to be gathered prior to concluding that this is the only alternative. At the conclusion of the meeting, it was determined that the following action would be taken: 1. Bruce Opp of Burlington Northern and Pat Tracy should be contacted and included in the process. O'Neill indicated that he would invite both to the next meeting. 2. Before a plan can be developed, a clearer understanding of the pollution problem must be established; therefore, soil testing should be conducted ASAP. O'Neill indicated that he would obtain cost estimates to survey the entire site, including the Nelson Oil site. It was the general conclusion that the operators/property owners would finance soil testing procedures. 3. Bill Aydt of J.N. Oil agreed that it would make sense to table the setback variance request scheduled for review at the May 8, 1992, Planning Commission agenda. The next meeting of the group is scheduled for 1:00 p.m. on Wednesday, April 15, at City Hall. At this meeting, the soil survey cost estimates will be reviewed, and Tracy and Opp will be able to provide input on the matter. If you should have any comments or questions regarding this summary, please call. MONTCEL O 250 Env Beoadvov P.O. Bos 1147 MonriceAo, MN 55362.9245 NENO Phone: (612) 295.2711 Mom: (612) 333.5739 Far: (612) 295-4404 TOi Bill Aydt, Jim Moores, Jeff Michaelis, Pat Tracy, Bruce Opp of Burlington Northern, Rick Itolfsteller, John 6imola, 011ie Koropchak, and Ken Maus FROM: Jeff O'Neill, Assistant Administrator DATE: April 16, 1992 This memo summarizes the meeting of April 15, 1992. The meeting was attended by B111 Aydt, Jim Moores, Jeff Michaelis, Bruce Opp, John Blmola, and myself. The purpose of the meeting was to follow up on the previous meeting and to establish a plan of action. Following are the Item that wore discussed at the meeting: 1. Bruce Opp was brought up to date on the situation in general. The group was informed that Pat Tracy was notified of the mooting by Jim Moores and through correspondence sent by City staff. 2. Jim Moores reported that J.N. tanks aro registered. jet Michaelis reported that the Riversido oil tanks wore not registered up until last weak. Michaelis Indicated that ho does not think that the former Nelson oil tanks are registered with the MPGA. 7. Jeff O'Neill reviewed tho coat estimates to dotormino the, extant of pollution at the site submitted by Asorican Engineering Testing. O'Neill noted that the Cost Of the phase I study amounts to $5,470. Information regarding the scope of the study is a aE'icTi3M— Additional Information was obtalnod from American Engineering Testing regarding the potential for added expense to study the site In the event pollution is found. It was noted that If the ground water is not lspacted, L Homo April 16, 1992 Page 2 the additional study to detect contamination could cost from $2,000 to $20,000. The actual cost to treat the soil could range from $20,000 to $100,000. If ground water is Impacted, the cost rises accordingly. At least three monitoring wells would need to be installed at the site at the cost of $2,000 apiece. The cost to remedy the problem could coat tens of thousands of dollars It ground water treatment systems are required. The group reviewed the cost estimates from American Engineering and concluded that It would be premature to order the phase I soil borings until the following planning has taken places 1. Develop a relocation plan. It was the consensus of the group that a relocation plan should be prepared prior to testing so that the tank operators would have soma options In the event pollution is found on the site. The operators did not want to be In a situation where they would be forced to move off the site by the PCA prior to having a place to relocate to. 2. Jim Noores, 8111 Aydt, and Jeff Michaelis indicated that they would supply City staff with cost estimates to relocate the existing bulk tanks to a site approximately a mile away. They would also develop cost estimates to relocate their facilities elsewhere on the same site. These cost estimates would be provided to City staff as soon as possible to assist In development of a relocation plan. It was determined that the annual lease rate, Including taxes and assessments, for use of the BN property, Is about $1,000/yoar. 1. O'Neill and Blmola stated that they would work with the City Administrator, HRA, and Economic Development Director to find a suitable site In the industrial park area with the goal of keeping costa down an much as possible. They reported that they would work closely with Bruce Opp of Burlington Northern throughout the process and take advantage of any opportunities to buy or trade land. Bruce Opp Indicated that BN to willing to listen to proposals and would likely be interested in selling the property or trading It for other property. Another meting of the group was scheduled tentatively for three to four weeks from April IS. The final date will be determined by City staff depending on the progress on research and plan development. If you should have any questions, or It you have anything to add, please contact m.