HRA Agenda 07-12-1995MIA -A ; ^ Ca 0
AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, July 12, 1995 - 7.00 p.m.
City Hall
MEMBERS: Chairperson Al Larson, Vire-Chairperson Brad Barger,
Everette Ellison, Tom St. Hilaire, and Roger Carlson.
STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Koropchak.
GUEST: City Planner Steve Grittman, Northwest Associates.
1. CALL TO ORDER.
2. CONSIDERATION TO APPROVE THE JUNE 5, 1995. HRA MINtITES.
3. CONSIDERATION OF A COMPREHENSIVE PLAN UPDATE/REDEVELOPMENT
DISCUSSION BY STEVE GRITTMAN.
4. CONSIDERATION TO ACCEPT THE DECLARATION OF POTENTIAL CONFLICT
OF INTEREST SUBMITTED BY COMMISSIONER BRAD BARGER.
5. CONSIDERATION OF PROJECT UPDATES:
a) Jim Harwood
b) Gary Singer
C) Brad Larson
5. OTHER BUSINESS:
a) Approval of Bills.
b) Example of Publlcorp response relating to TIP inquiry.
C) Other.
7. ADJOURNMENT.
HRA AGENDA
JULY 12, 1995
Consideration of a Comprehensive Plan Update/Redevelopment
discussion by Steve Grittman.
A. Reference and Backaround:
At the recommendation of Chairperson Larson, Jeff O'Neill, and
Koropchak, Mr. Grittman was invited to the HRA meeting to
urdgte the commissioners on the progress of the Comprehensive
Plan. The update covers the period since the joint -
commissions meeting through the neighborhood meetings to
present. It is important that the HRA stay in -tune .ind
participate in the discussions for development or upgrading of
the plan. The HRA is the city's redevelopment entity and ono
of its financing toole.
Please make every attempt to attend the meeting. Tho HRA
needs to establish and prioritize its short and long-term
goals.
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HRA AGENDA
�1 JULY 12, 1995
b. Consideration to accept the Declaration of Potential Conflict
of Interest submitted by Commissioner Brad Barger.
A. Reference and Background:
Brad Barger is one of two partners of Vector Tool &
Manufacturing, Inc. and serves as an HRA commissioner;
therefore, he submits the enclosed Declaration of Potential
Conflict of Interest. Mr. Barger and his partner, Jim
Harwood, are interested in the purchase of the HRA lot: Lot
5, Block 3, OIP. This declaration is similiar to thr_
declaration used by Commissioners Al Larson and Brad Barger
relating to the Senior Housing project.
The HRA Is request to make a motion accepting the Declaration
of Potential Conflict from Mr. Barger for entry into the HRA
minutes. Mr. Barger Is not to discuss the project with other
HRA commissioners, meaning at no time. Mr. Harwood, his
partner, will be our contact.
B. Alternative Actions;
1. A motion to accept the Declaration of Potential Conflir;t
of interest, from HRA Commissioner Brad Barger.
2. A motion denying acceptance of ..he declaration.
3. A motion to table any action.
C. Recommendation:
Recommendation to Alternative Action No. 1.
D. Sunnortina Data;
Copy of the executed declaration.
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HRA AGENDA
V .JULY 1 2 , 1995
5, consideration of Project Updates:
a) Jim Harwood - Copy of the letter to Mr. Harwood with
potentlal options for land purchase. Mr. Harwood
Indicates the partnership is most interested in the HRA
lot, financed without the use of TIP. Attorney Rubiil wil i
prepare a purchase agreement and note hased on a
negotiated land price. Land write-down tied to a number
of jobs created or a payroll range over a negotiated time:
j:arIod. One concern Mr. Harwood raised is the
availability of skilled workers in the area. Tho
partnership Is continuing to prepare development costs
prior to meeting with the financial consultant.
b) Gary Singer - City staff met with the two partners of
this wholesale dealer of plumbing, wells, and septic
supplies. The company proposes to construct a 20,000 sq
ft warehouse/office with future plans for c. showroom.
The company has contacted Charlie Pfeffrr for
approximately 2.6 acres of i-1 property along Fallon
Avenue. The 17 -year old company has three other
locations in Hopkins, Egan, and Blaine which comhined is
over 10,000 eq ft. The company rmploya 70 fall -time
personnel and the Monticello location would empiny 5-6
a within 2 years. Interested In TIF or finnnnial
assistance, enclosed is rhe response from Pub]lcorp which
was received In a timely manner. As indicatcd by a ni•w
provision to the TIP law, the HRA is unable to confairl"r
TIF because an Economic Dist0 ct created on land which
has a green acre claosification muot be for manufnr,t.uring
use. The company continues to negatiate with Charlle and
As interested In other assistance (GMEP).
C.) Brad Larson - I did rontart.. Brad regarding his lotter to
the poor office owner and tenant. Jack Hutrhinson, lural
postmaster, passed thr letter on to the ownrr. Brad had
a telephone call from the owner's, businonn manager
requesting previous written corrspondents rnlatinU to the
noncerns of the joint -utilized driveway. Brad indicated
there was none. The father (owner) passed away and thn
business manager to representing the onn. Brad anked If
the City would rnnoider a temporary drive-wny with aaco•ns
to Linn Street for postal use.
Paur. 1
250 East Broadway
P. O. Box 1147
Monticello, MN
55362-9245
Phone: (612) 295-2711
Metro: (612) 333.5739 VECTOR TOOL & MANUFACTURING
Fax: (6l2) 295 4404 James C. Harwood
June 9, 1995
City of Monticello
ASSUMPTIONS: Construction of a 15,000 eq ft tip -up panel
offico/manufacturing facility.
Estimated Market Value of Building - $375,000
30-40 jobs within three years, high-tech company
Average wage: $12.00 ph
Construction 1995
1995 Tax Rate - 113.028%
LAND: HRA - Lot 5, Block 3, Oakwood Industrial Park
Zoned I-2
6.4 Acros
Building setback, Front and roar 50 feet, sides 30
feet.
Along the westerly boundary of Lot S is an
additional 40 foot utility easemont.
Purchase Price - $96,000 or $15,000 per acre.
Preliminary projections indicate with the use of Tax Increment
Finance (TIP), the land write-down would be approximately $55,000.
Without the use of TIP, the HRA could consider an agreement in the
form of a note or loan whereby the HRA would agree to write-down
the land cost by $56,000. Example: Victor Tool & Mfg would agree
to crcate 32 full-time jobs ($1,780 per job) within two or thruo
years. If at the end of the two or throe years Victor Tool created
only 28 of the 32 jobs, a provision within the agreement would
require Victor Tool to repay the HRA the dlfferunce of $7,000 plus
the ayrood upon terms. It is my undorotandIng , SBA would cone ider
the $56,000 as equity as the note or loan would have no principal
or Interest payments.
Romumber those are only preliminary projections. If you are
Interested in a cloaror understanding of the no TIF program, I
suggest we moot with the City's financial conoultant. It would be
boot if tho estimated project costo were availablo such so land,
construction, and M&E coots and availability of oqulty.
ASSUMPTIONS: Same as above.
LAND: City Lots S and 6, Block 1, Oakwood Industrial
Park, Second Addition.
Zoned I-2
3.26 Acres
Building setbacks the same as above, no additional
utility easement.
Purchase Price - $66,500 or $19,788 per acre.
TIF assistance would be in the neigborhood of $50,000.
In order to utilize TIB, the HRA must have written evidence that
the business is considering an out -state location and the project
would not proceed without the use of TIF. TIF is subject to
approval by the HRA and City Council in accordance with the
Minnesota Statutes. Also, non -TIF write-down is subject to HRA
approval.
It was my pleasure to meet you on Wednesday. I look forward to
exploring the best financial package for Vector Tool &
Manufacturing and to see a new facility for Vector Tool &
Manufacturing constructed within the City of Monticello.
If you should have other Questions, please feel free to contact me
at 295-2711.
Respectfully,
CITY OF MONTICELLO
011ie Koropchak
Economic Development Director
HRA Lot
Building: 15,000 sq ft @ $25.00 per sq ft
Land: 87,120 sq ft @ $.40 per aq ft
191,664 sq ft 9 $.25 per eq ft
TOTAL ESTIMATED MARKET VALUE
$100,000 $357,764
.0300 .0460
$ 3,000 $16,457.14
New Capacity Value $19,457
1995 Tax Rate 1.13028
ANNUAL TAXES $L8 -rem $ -A 1. 4011 .
$375,000
$ 34,9"'Q4r
$ 47,916
$457,764
Lenny, remember this is not tax increment? Are my preliminary
projections of TIF assistance within reason?
I
250 East Broadway
P. O. Box 1147
Monticello, MN
55362.9245
Phone: (612) 295-2711
Metro: (612) 333.5739
Fax: (612) 295-4404
Mrs. Barbara Schwientak
Executive Director
Monticello -Big Lake Community Huepitrtl
1013 Hart Boulevard
P.O. Box 480
Monticello, MN 85362
July 6, 1995
Doar Barb:
On behalf of the Monticello Housing and Redevelopment Authority
(HRA), I wish to express our appreciation of your role in the
organizational and planning stages for the development of the
multi-oonlor housing project. Your assertive leadership role wag
both instruments] and key to making Mississippi Shored become a
reality. The joint -community project Is an asset to the City of
Monticello no it provides an additional housing alternative for
area oonlor residents.
Alan, many thanks to the Board of Dlroctoro of Monticollo•BJg Lnko
Community Hogpital and the CounclJmembero of the City of Monticello
for their participation and support Jot the development of
Mississippi Shoroe.
Again, our appreciation to you, Barb.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
A] Larson
HRA Chairperson
V AL/ok