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HRA Agenda 06-04-1997AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, Jane 4.1997 - 7:00 pin. City Hall MEMBERS: Chairperson Brad Barger, Vice Chairperson Steve Andrews, Darin Lahr, Bob Murray, and Dan Fne. COUNCIL LIAISON: Roger Carlson. STAFF: Rick Wolfsteft, Jeff O Neill, and 011ie Koropcbak. GUEST: Kristin Graham Project Manager, Homestead Housmg Center Fred Patch, Chief Building Official I . CALL TO ORDER. 2. CONSIDERATION TO APPROV E THE MAY 7, 1997 HRA MINUTES. 3. CONSIDERATION TO ADDING ITEMS TO THE AGENDA. 4. CONSIDERATION TO HEAR A PRESENTATION BY KRISTIN GRAHAM - PRELIMINARY CONCEPT OF A MULTI -HOUSING SENIOR CENTER. 1 " 5. CONSIDERATION TO DISCUSS THE STATUS OF THE DOWNTOWN AND RIVERFRONT REVITALIZATION PLAN. 6. CONSIDERATION TO GRANT PERMISSION TO THE DOWNTOWN MERCHANTS ASSOCIATION FOR A ONE -DAY USE OF THE HRA WEST BROADWAY LOT. 7. CONSIDERATION TO DISCUSS HRA BY-LAWS FOR POTENTIAL AMENDING. R. CONSIDERATION TO SET A SPECIAL MEETING TO ESTABLISH A PROPOSED 1998 HRA BUDGET. 9. CONSIDERATION OF PROJECT UPDATES: a) Lake Tool, Inc. b) Fay -Mar, Inc. C) Cedms Creek Craftsman, Inc. d) Allied Companies/Midwest Graphics 11. OTHER BUSINESS. a) Joint rrtceting between the City Council & Commissions, Monday. Jute 30, 50) p.m, City Hall, Food/beverage provided. b) Next regular meeting of the HRA, Wednesday, July 2, 1997. ' 12. ADJOURNMENT. MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Special meeting of May 7,1997 - 6:00 p.m. City Hall MEMBERS PRESENT: Chairperson Brad Barger, Vice Chairperson Steve Andrews, Darren Lahr, and Dan Frie. MEMBER ABSENT: Bob Murray. COUNCIL MEMBERS PRESENT: Mayor Bill Fair, Clint Herbst, and Brian Stumpf. COUNCIL MEMBERS ABSENT: Bruce Thielen and Roger Carlson. STAFF PRESENT: Rick Wolfsteller and 011ie Koropchak. GUESTS: Mark Ruff, Ehlers and Associates, Inc. Attorney Steve Bubul, Kennedy & Graven. . Call to order HRA Chairperson Barger called the special HRA meeting to order at 6:00 p.m. 2. Information anthering and discussion of TIF and its um. Matic Ruff gave a brief overview of the working relationship between the HRA and Ehlers. The HRA hired Ethers as their financial consultant about two years ago. Mark summarized the HRA policy: To increase property taxes to cover eligible costs over a certain time period. Next. Mark informed individuals that the Council actually approves the findings for the "but for" test, but in reality the Council delegates this to the HRA. How do you finance a project'! When the older TIF Districts were created, the use of TIF was much flexr. Today, if within four years after the certification of a district no project has occurred within the parcel(s), the parcel(s) are dropped fFom the district. If within five years after the certification of a district no finance plan is set-up, the parcel(s) are dropped from the district. The greatest financial risk 6 when the city sets general obligation bonds for land purchase and dernolition. Other finance methods are the pay-as-you-go and up- front methods from HRA/TIF Funds. HRA NUNUTES SPECIAL MEETING OF MAY 7, 1997 How much do you need to give in TEF assistance? Equity should be a component. Assistance should be consistent among businesses. Example: Generally for land write- down. LGAIRACA Penalty - For general purposes, the Council approved and delegated to the HRA the administration of TEF. In years 1990.1995, the penalty to cities was approximately E.35 to SAO for every $1.00 of tax increment. In 1995, legislators approved the local contribution match Five percent of the tax increment for redevelopment distrix and 10% of the tax increment for economic district. This is a commitment made at the time the district is established by either the city or HRA and the matched dollars must go into the project. Example: Not for city engineer but can be used for WAGSAC. For the HRA, this must come from non-restrictive fimds (the HRA General Fund) or can be supported by the tax Levy. Lastly, Marts informed individuals that historically the State Auditor monitored TIF and within the last couple of years the monitoring was transferred to the Department of Revenue. Although the Departmem of Revenue has no enforcement powers, it has become a political power issue and Merl: cautions Cities and HRAs to work with the Department of Revenue. The County Attorney is actually the enforcer. Aa%MM= With the City Council members need to convene the Board of Appeals meeting at 7:00 p.m., the special HRA meeting adjourned at 7:00 p.m 011ie Kompchak, Executive Director MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, May 7, 1997 - 7:00 p.m City Hall MEMBERS PRESENT: Chairperson Brad Barger, Vice Chairperson Steve Andrews, Darrin Lahr, Bob Murray, and Dan Frie. STAFF PRESENT: Rick WolfsteBer and 011ie Koropchak. GUESTS: HRA Attorney Steve Bubul. Steve Krenz, Midwest Graphics, Inc. Jeff Congoll, Allied Companies John Komarek, Cedrus Creek Craftsmen. Inc. Brad Johnson, Lotus Realty Services. I . Call to order. n Barger called the regular meeting of the HRA to order at 7:00 p.m Darrar Lahr made a motion to approve the April 2, 1997 HRA minutes. Seconded by Steve Andrews and with no corrections or additions, the minutes were approved as written. Consideration of adding hems to the agenda Koropchak introduced Steve Kram, CEO of Midwest Graphics, Inc., and Jeff Congoll, Allied Companies. Mr. Krenz informed HRA members that over the 28 -year fife of Midwest Graphics, the company has become one of three largest print centers in the local trade association. Midwest Graphics is also into communications. Monticello Investment Company, the holding company of the existing facility located at 9530 Fallon Avenue employs 20 full-time plus temporary help. The starting wages are low-paying and progress higher. Additionally, the company leases space at 206 Pine Street for its telemarketing division. The company has an option on this building. Mr. Krenz continued stating that Midwest Graphics serves Fortune 500 companies through marketing of data, the way of today. The company does not compete with FSI. The communications service requires a higher skid. 3M, National Car Rental, Northwest Airlines, Dayton's, and Toro are some known customers. HRA MINUTES MAY 7, 1997 The estimated 1997 local economic impact of wages is about 5700,000. UPS is their largest shipper as well as other local shippers, the company provides employees with an opportunity to grow and offers good benefits. The proposed project is 36,000 sq 11 manufacturing space and 8,000 sq ft office space which could accommodate 72 telemarketers and has 100 parking spaces. Allied Companies would be the developer with a build -to -suit to lease option. It is anticipated that the proposed project would create 22 jobs within the first year. The company plans to lease out the current Fallon Avenue facility. The projected value of the new building is approximately 1.4 million, an attractive facility. The legislative requirement of "Green Acres" places an incumbrance on the Monticello Commerce Center property. The "Green Acres" five-year window expires in year 2000. In order to create a T[F District, any proposed facility must consist of 85% manufacturing or production space of tangible personal property, including processing resulting in the change in condition of the property. Printing is considered a manufacturing business and if the developer/owner are willing to substantiate their product results in change and 85% of the building is for manufacturing, TIF can be utilized. HRA members agreed the project has merit and one member stated the overall wage/benefit package is about $12.00 per hour. Koropchak provided a time schedule for preparation of a TIF District which would spare the developer the increased costs of sanitary sewer hook-up fee. Steve Andrews made a motion authorizing Ehlers and Associates to begin preparation for establishment of TIF District No. 1-23 subject to the developer/owner providing evidence of findings for the "Green Acres" and "but for" tests, execution of the Pre TIF Agreement, and submittal of a $5,000 cashier cash. Brad Barger seconded the motion. Attorney Bubul to work with the developer relrtuig to "Green Acres" finding. With no further discussion, the motion passed unanimously. HRA members determined the proposed project met the local TIF Policies. Consideration ofrequest by Developer Komarek for an update relating to the development of TIF DistrictNo- 1-20 and the HRA review of the contract relating thereto Koropchak submitted a written account of the progress of the project in the agenda supplement. John Komarck, the developer, presented the HRA members with a letter drafted by Attorney Brad lzrson. The letter requested a one-year extension of all performance dates within the contract and stated the delay was caused in pan by the time necessary to clear the title of the forcer Carlson property and the torten title of the former Gille property. Additionally, the letter addressed the confusion of the property description as described within the contract and the approach taken by the city engineer to resolve the ponding issue. Komarek noted that the Gill property had sorra 41 title hens which contributed to the slow process of the yet uncleared title. Komarek indicated the HRA MINUTES MAY 7, 1997 need perhaps for a left -turn lane to enter Prairie West from County Road 75 and also indicated sales were a little slower than anticipated. Attorney Bubul noted that Komarek, the developer, had been advised of the torrens title relating to the Gibe property. HRA members agreed and noted the role of the HRA is not to place judgement on design standards set by the City Enginm or City Staff. Lahr noted the Letter of Default was prepared at the direction of the HRA With the developer agreeing to pay all costs associated with amending the contract, Steve Andrews made a motion to amend the Private Redevelopment Contract of January 13, 1997, between Cedrus Creek Craftsman Inc., the HRA, and the City, extending the date of construction commencement and completion and the date of recording and Riling of the final plat for Prairie West Second Addition by one year. Bob Murray seconded the motion and with no further discussion. the motion passed unanimously. The commissioners felt the non- performance by the developer was beyond the control of the developer, Cedrus Creek Craftsman, Inc. Prior to leave the meeting, Attorney Bubul informed members that voting by proxy was not allowed because of the open meeting law. Secondly, in response to the HRA's question: What is our risk if the HRA simplifies its Private Redevelopment Contracts? This question arose as the HRA has been requested to amend a number of contracts. A general form or simplified contract could be done. however, continued Bubul at times the HRA may wish they had more leverage as in the case of TIF Districts I -I and 14. 5. Consideration to hear an update on potential redevelopment p[Qiects by Brad Johnson Brad Johnson. Lotus Realty Services, informed members of the downtown redevelopment projects in Chaska and Chanhassen. Johnson continued: Pushing something that isn't happening makes redevelopment difficult. This along with title, engineering, and acquisition problems and the perception by legislators that the use of TIF takes away revenues from the school districts doesn't make things easier. Convenient retail and entertainment appear to be strengths, hotels are a risky business. Johnson feels the Monticello Mall is not going to survive as is and secs the need to rue and stan over. His fust attempt was to work with the local grocer and currently has a second grocer wider study. A drug store perhaps fits into the concept. Johnson informed members any consideration of a plan for a hotel in Monticello is about three months out. In Chaska. the developer obtained the purchase option which eliminated the relocation costs. Johnson anticipates a hotel in Monticello much the same as Chaska: a destination hotel, full-service, excellent sales staff, meeting place with deli/bakery. The corporate level market in Monticello is weaker than in Chaska. To HRA MINUTES MAY 7, 1997 support the day -time business of entertainment and restaurants, housing and office employment need to be worked into the area plan. Johnson concluded: Redevelopment is what the community wants, it must make sense (economical sense) and add value to a she. 6. Consideration to dismiss HRA Iry-laws for pgtential amending Tabled until June meeting. 1. Consideration to review the retuned alMs from Blocks 54 and 64 for discussion and further direction HRA members were pleased with the 100% response rate of the surveys mailed to property owners in the 54 and 64 Blocks. The surveys to gage their level of interest for entering into a purchase option. Members also agreed that perhaps any further direction was premature until adoption of the Revitalization Plan, recognizing the potential for a developer to secure the options, and the potential increased purchase price for a public entity to acquire. DaTrin Lata made a motion authorizing a general note of thanks be drafted and mailed to the property owners of Block 54 and 64. Brad Barger seconded the motion and with no further discussion, the motion passed unanimously. 8. Consideration to review the content of the Contract between the HRA and Hoisin on Keg er Group Inc. relating to the DowntownNiverfront Revitalization Study2lan HRA members accepted the written agenda supplement update. 9. Consideration to set special meeting with Ken Barthel- Veit Companies Mr. Barthel informed the Executive Director that a special meeting with the HRA appears premature. 10. Consideration to appoint an HRA representative to a task force for defining the need and uses and sources_ of a training and epmmunjty center. Steve Andrews volunteered to be the HRA representative. Brad Barger trade a motion appointing Steve Andrews as the HRA representative on the training and community caner task force. Darrin Lahr seconded the motion and with no further discussion, the motion passed unanimously. HRA NQNUTES MAY 7, 1997 Steve Andrews made a motion to approve the monthly HRA bills. Brad Barger seconded the motion and with no further discussion, the motion passed unanimously. 12. Ad1mtIDlc= The HRA meeting adjourned at 10:45 p.m. 011ie Koropchak, Executive Director 250 East Broadway P. O. Box 1147 Monticello, MN 55362.9245 Phone: (612) 295.2711 Metro: (612) 333.5739 Fax: (612) 295-4404 Richard and Marian Carlson P.O. Box 251 Monticello. MN 55362 Dear Richard and Marian: Recently you participated in a research project conducted the Monticello Housing and Redevelopment Authority (HRA). As stated in the cover letter, the research was merely an attempt to gage the level of interest of property owne:n for the potential consideration to enter into a purchase option. The HRA appreciated your timely response and thanks you for your participation. Sincerely, HOUSING AND REDEVELOPMENT AUTHORr" IN AND FOR THE CITY OF MONTICELLO Bradley D. Barger Chairperson BDWok OJJia of Public Wonla, 809 Colt Courw Rd, Mor ticetlo ,tr V S&962 • M.,.- (612) 285. 1 70 • For. (612)293-3170. cru. 1 0 HRA AGENDA JUNE 4, 1997 Kristin Graham is the Project Manager for Homestead Housing Center and is an acquaintance of Fred Patch, Monticello's Chief 1361dnhg Official. Kristin has visited with Fred and Koropchak a couple of times and is interested in the community of Monticello for development of a multi -housing senior center. Currently, Homestead Housing Center, a rural housing cooperative for seniors, is constructing a 34 -unit owner -occupied center in Chisago Lakes. Tire facility includes common space and garages. The area along the westerly edge of Front Street and northerly edge of Lmn Street was the targeted -sae arca of the initial discussions. The targeted area ties within the boundaries of the TIF Redevelopmem District and supports the concept of high-density housing close to the downtown area as proposed within the Downtown and Riverfrom Revitalization Plan. Kristin will make a presentation to the HRA members and it is my wderstanding they are looking to the HRA for a level of acceptance of the preliminary concept. The preliminary concept meaning does an owner -occupied multi -senior center makes sense for the area and could the center serve as a transition between a residential and commercial area? Remember this is very preliminary as questions remain unanswered: What is the market? Is it financially feasible? Is it the best use for river frontage property? What is the quality of the finished product? Enclosed is a map outlining the current proposed area. 49 r HRA AGENDA 14.. JUNE 4, 1997 CS A. As per the enclosed attachment, the draft copy of the revitalization plan was reviewed for comments by some board members and committee chairs of the MCP. 7be plan and comments were forwarded to Michael Scbroeder, Hoisington Koelger Group, Inc., on May 29, 1997. Michael is in the process of revising the plan upon receiving the comments. Prior to adoption of the revitalization plan as part of the Comprehensive Plan by the City Council, city staff recommends approval by the HRA and the Planning Commission. At the Planning Commission a public hearing will be held. It is felt that perhaps it is best to have the public hearing prior to HRA approval in order to incorporate public comments into the final draft for HRA review since the contract for the plan is between the HRA and Hoisington. If this sequence is used, the public hearing would more than likely be July I and the HRA approval July 2 or August 6. 114 C DRAFT ONE OF DOWNTOWN AND RIVERFRONT REVITALIZATION PLAN PLEASE REVIEW TIHE DRAFT COPY OF THE DOWNTOWN/RIVERFRONT REVITALIZATION PLAN. YOU WILL NOTE THE DRAFT COPY DOES NOT INCLUDE A SECTION ON FINANCING. MICHAEL SCHROEDER WOULD LIKE YOU I0 ADDRESS THE FOLLOWING TWO QUESTIONS: 1. DOES THE DRAFT COPY OF THE PLAN ACCURATELY AND COMPLETELY COVER THE INFORMATION PRESENTED AT THE WORKSHOPS? 2. WHAT WITIM THE DRAFT COPY OF THE PLAN IS UNCLEAR OR NOT UNDERSTANDABLE? PLEASE MAKE ALL COMMENTS ONLY ONE COPY WILL CIRCULATE FOR INDIVIDUALS TO MAKE COdi�iD THE TARGET DATE FOR THE PUBLIC HEARING OF THE PLANNING COMMISSION IS SCHEDULED FOR JUNE 3, 1997. THIS IS AN AGRESSIVE SCHEDULE AND ALLOWS EACH PERSON 2.3 DAYS FOR REVIEW. ALL REVIEWS MUST BE COMPLETED BY MAY 21 TO MEET THE THE PUBLIC HEARING. PLEASE CALL OLLIE KOROPCHAK AT 271-3208 TO PICK-UP THE DRAFT COPY OR DROP-OFF AT CITY HALL. 1 \ REVIEWERS: ort rel_ r� DartmLahr Pam Ca bell Lyrm Dahl AI Larson Lois Maus Merrill Busch S�i9 —�, S. 20 — y Jeff O'Neill (In-house) Rita Ulrich, Project Manager (In-house) FROM OLLIE KOROPCHAK. 5/597 00=- F i TO: Monticello HRA FROM: Jeff O'Neill, Assistant Administrator Re: MCP Riverfront/Redevelopment plan Following is a summary of the steps that need to be followed to achieve the goal of integrating MCP/HRA downtown redevelopment planning efforts into the city's comprehensive plan. This is written from the perspective of an MCP Board Member (representing the Planning Commission) and as a city staff member responsible for preparing the original request for proposal on which the planning study was based. I . The MCP needs to have an approved plan in place as soon as possible, preferably by the end of June. The plan should then be submitted to the HRA for ratification. HRA approval is very important in that much of the underlying financing is provided via HRA activities. 2. HRA should consider adoption of the plan and authorize submittal to the Planning Commission for consideration as an amendment to the comprehensive plan. HRA approval of the plan should be considered at the regular meeting in July. As an ahernative, the HRA could consider adopting the plan at a joint meeting with the Plarming Commtission. The joint meeting would be conducted at the regular meeting of the Planning Commission in August. 3. At the regular meeting in July, the Planning Commission should call for a public hearing to be held at the regular meeting in August. 4. The Planning Commission should consider the amendments to the comprehensive plan at the regular meeting in August. The City Council would follow with Consideration of the document at a subsequent meeting. 5. Once the comprehensive plan amendment is approved, then the Planning Commission with assistance from the MCP may make ordinance changes necessary to support the comprehensive plan. Such changes would include amendments to the sign ordinance, zoning district modifications, architectural design standards, and the like. �! HRA AGENDA l� JUNE 4, 1997 6. Consideration to g=permission to the Downtown Merchants Association for a one-day use of the HRA West Broadway Lot. A. Reference and Back2round- Enclosed is a copy of the City Council agenda of May 27 relating to the one-day farmer's market authorization. The Council adopted ahernative no. 1. Last year, the HRA granted the permission subject to the organization carrying liability insurance and the agreement to return the property to its original state. B. Altemathre Action ; 1. A motion to grant permission to the Downtown Merchants Association for a one- day (August 9, 1997) use of the HRA West Broadway lot. 2. A motion to deny permission of use of the HRA lot. 3. A motion to table any action. t C. ttmdaticn. Recommendation is Ahernative No. I subject to the organization carrying liability insurance and returning the property to its original state. D. SupRmW42= Copy of the Council agenda. C Council Agenda - 6/27/97 UOUNI. P. ri- 9.77.7-17T"7.I.w % 1 1 The Downtown Merchants Association is interested in promoting a 1 -day farmer's market in the downtown area as part of the planned all -city garage sale event on Saturday, August 9. Since the City currently requires a permit under the transient merchant ordinance for individuals or organizations that want to sell farm or garden fruits and vegetables during the summer, the Downtown Merchants Association should also be obtaining similar approval of a license, although the daily $10 fee could simply be waived by the Council, as this is a non-profit organization. The farmer's market is being proposed on the empty lot owned by the HRA (north side of Broadway), and the Association will be getting permission from the HRA. 1. Approve the issuance of a 1 -day farmer's market permit for the Downtown Merchants Association as part of the August 9 all -city garage sale event and waive the permit fees. Do not approve a permit. Although a farmer's market where more than one individual may be selling fruits and vegetables is not normally a permitted use under the transient merchant ordinance, the Council does have the authority to consider this 1 - day event similar to other transient merchant vendors we do allow during the summer. It is recommended that the authorization be given subject to the HRA approval of using their property and that the permit fee be waived for this event. None. �r HRA AGENDA l - NNE 4, 1997 A. At the May HRA mee in& this item was tabled for consideration at the June meeting. Previously, you received copies of the bylaws from Columbia Heights and Burnsville as well as the bylaws for the Monticello HRA. Please review those copies for discussion to amend I �i HRA AGENDA - JUNE 4, 1997 jEW-M-TT1 11 ;.y 11 :y. 1 71 .: 1 .l 11 . : •i* In the week of June 9, Mark Ruff, Rick Wolfsteller, and myself will review and update the HRA General Fund and TEF Surplus Financial Statements. We will also consider the proposed legislation relating to commercial/industrial classification and how it may effect us. Proposed changes from fust $100,000 EMV to $150,000 EMV Q 2.71/a and over $150,000 EMV from 4.6% to 4%. They also have proposed a targeted -class rate over 4 years of 3.5%. Proposed changes for residential are fust $72,000 EMV to $75,000 C 1% and over $75,000 EMV from 2% to I.85%. The proposed legislation still needs the Governor's signature. Lastly, we will review the reporting as now required by the State Auditors. It is Mark's recommendation to set a special meeting the week of lune 16. You will note the Mayor has set a meeting between the Council and all Commissions for Monday, June 30, 1997, 5:00 p.m. at the City Hall. Food/beverage will be provided. Enclosed is a copy of a letter to department heads from Wolfsteller relating to the upcoming budget process. Please keep in mind economic, redevelopment. and housing goals of the community, such as: future industrial park, downtown revitalization. scattered housing programs, and commercialtretail loans. Please consider a date for the special HRA meeting. Right now, the EDA is scheduled to meet lune 19 and the City/township on lune 17 both in the evening. Office of the City administrator 250 Erisr Broadw•av Monticello, MN 55362.9245 Phone: (612) 295-2711 MEMO Metro: (612) 333.5739 TO: All Department Heads and City Staff FROM: Rick Wolfsteller, City Administra DATE: May 27, 1997 RE: Development of capital improvement program oK Now that spring has finally arrived, can work on the 1998 budget be far behind? In conjunction with preparation of the 1998 budget document, I would like to be able to present to the City Council a basic 5.10 year capital improvement program budget. For years, we have talked internally of the need to provide the Council with an idea of the major capital expenditures the City will be experiencing in the coming years; and with the present Council's interest in seeing a capital improvement program budget prepared, I think it's important to begin that process, even if it's only a quick generic document. I am currently in the process of obtaining sample documents from other communities to see the type of information that is included in a C.I. program, but I know we have the ability to at least put together a listing of capital improvement items that we think will be needed in the upcoming years. City staff and department heads should make a list of the major items you feel will have to be addressed in the coming years such as vehicles and equipment; building and land acquisition items; and infrastructure improvements, including new utility extensions and/or renovations of existing infrastructure. If anyone has any specific thoughts on a financing mechanism for the particular improvement you have jotted down, also include this in your notes. After you have assembled a list of your equipment and project needs, please forward this information to your immediate supervisor, and all department heads should turn in the information to me by June At this time, the department kends will meet to review our initial list of capital improvement project ideas so that we can develop a simple program format that the Council can review as part of the 1998 budget process. HRA AGENDA NNE 4, 1997 Consideration of ptpiect updates- a) lake Tool, Inc. - The closing took place at the title company on Wednesday. May 28. So the project is on its way. b) Fay -Mar, Inc. - The closing is scheduled for Monday. June 2, at the title company. For your information, Chairperson Barger and myself executed a Subordination Agreement as requested by the lender and reviewed by the Attorney Bubul. This is common practice for the HRA. C) Cedrus Creek Craftsman, Inc. - Enclosed is a copy of the City Council agenda item which describes the effect of the once -year delay. One thing omitted is the one- year delay means the City may not receive the park dedication land until April 1, 1998. The Council approved the amendment. d) Allied Companies/Midwest Graphics - I spoke with Jeff Congoll this week to see if any action was necessary from the HRA. He responded 'bot at this time " and said they were working on the project. Council Agenda - 5/27/97 6B. Con_aideration of approving amt-neimpnt to Contract for Private Redevelo m n by simnng thp. City -Ce reg Creek Crnftama rL - Inc., and the HRA. (O.K.) At the May 1997 HRA meeting, the commissioners voted to amend the Contract for Private Redevelopment between the City, Cedrus Creek Craftsman, Inc., and the HRA of January 13, 1997, extending the date of construction commencement and completion and the date of recording and filing of the final plat for Prairie West Second Addition by one year, The commissioners felt the non-performance by the developer was beyond the control of the developer, Cedrus Creek Craftsman, Inc. (John Komarek). The developer agreed to pay all costs associated with amending the contract. Because the City is a party to the contract, the Council is requested to consider approving the amendment. The Private Redevelopment Contract of July 3, 1996, is the "closing date -of the Hanawalt, Banyai, Gille, and Katzmarek properties. The contract was amended January 13, 1997, and this second request for amendment prevents the developer from default of the contract. The amendment includes extending the date for recnrdi ng and filing of the final plat for Prairie West Second Addition from April 1, 1997, to April 1, 1998. Additionally, the amendment includes extending the construction commencement date for phase I of the Prairie West Second Addition from July 1, 1997, to July 1, 1998, and the construction completion date as described in Section 4.1(a) on the amendment; the completion date of phase II of the Prairie West Second Addition and Prairie West First Addition by December 31, 2002. At the closing, July 3, 1998, the HRA provided upfront assistance in the amount of $217,000 for redevelopment of the project area. $32,500 of the $217,000 was for property within the TIF District, and a second not -to -exceed total of $32,500 will be paid the developer upon conveyance of townhome parcels as per the contract. Lastly, the developer will receive an additional $65,000 NPV pay-as-you-go assistance, and the HRA will recover $65,000 NPV for its costs. Both NPTs 0 8.5'.x, interest to commence to accrue from the closing date. Because the completion date for the construction project was extended per this amendment, the first payment date of the HRA recovery costs is modified from August 1, 1999, to August 1, 2000, and the final payment modified from August 1, 2011, to February 1, 2016. The HRA recovery cost is $65,000 NPV 0 8.5%. The interest will commence to accrue from the closing date or July 3, 1996. Council Agenda - 5/27/97 The first payment date of the developers pay-as-you-go assistance is modified from August 1, 1999, to August 1, 2000, and the final payment modified from August 1, 2018, to February 1, 2021. The developer's $65,000 NPV @ 0% interest rate from closing date or July 3, 1996, through May 31, 1997, and 0 8.5% from June 1, 1997, and thereafter. The HRA committed a total assistance of $315,000 within the redevelopment project area to encourage the removal of blight for the development of quality housing. L mS 1. A motion to approve amendment to Contract for Private d Redevelopment. r Q: 2. A motion to deny amendment to Contract for Private Redevelopment. A motion to table any action. C. STAFF RFrOMMPNDATION: Staff recommends alternative #1. Here is the net effect of the amendment: The commencement date for payback to the developer and HRA is delayed one year, total payback to the developer and the HRA is delayed by four years, the developer's payback interest will accrue from June 1, 1997, not the date of closing, and the district will now run the maximum life of 25 years. The developer agreed to pay the costs associated with amending the contract. In reference to the enclosed letter from the developer's attorney, Brad Larson: Within the Contract, phase I refers to the TIF District which lies within Prairie West Second Addition, and phase II refers to areas outside the TIF District within the Prairie West Second Addition and the Prairie West First qy Addition. Secondly, the developer was advised of the torrens title relating to 4 &A the Gille property by the HRA Attorney. Lastly, HRA members agreed their role is not to place judgment on design standards set by the City Engineer or City staff. D. SUPPORTING DATA: Letter submitted to HRA members from the developer's attorney, Brad Larson; Copy of the Amendment for Private Redevelopment. @4lrrc4 ,Oarson 6 4ttlh, 0.,94. ATTORNEYS AT LAW 717 WW 81084 y P.O. Boa 46 BRADLEY V. LARSON Monbcaft' Mkm°ota 59762-0"6 SALLY S. NELSON STEVEN J. MUTH PU4l6GaL JAMES G. METCALF. a cmma May 7, 1997 TELEPHONE 119MIMI t612) 295.3222 FAX (612) 295-3172 City of Monticello 250 East Broadway P. O. Box 1147 Monticello, Minnesota 55362-9245 ATTENTION: 011ie Koropchak Re: Contract for Private Development by and among the City of Monticello, Minnesota, Cedrus Creek Craftsman, Inc. and the HRA of the City of Monticello Dear 011ie: I %vrite this letter to you on behalf of John Komarek, President of Cedrus Creek Craftsman, in response to your April 7, 1997, default notice letter which you are giving pursuant to the contract between Cedrus Creek and the HRA I wanted to make sure that you were aware and there is of record an explanation of why the final plat for Phase 1 was not Sled and recorded by Anril 1 1997. I further wish to clarify that Phase I under the HRA agreement is acruallyPhase LNf the West Prairie plat master plan. As you are aware, Phase I is of record and there are sir (6) units constructed and die foundation has been poured for Units 07 and 98 and the lot is staked for Units 49 and 10. This was the intended orderly course of development as infrastructure was present and could be utilized to consecutively accommodate the build -out from east to west. In addition, there were tide problems with regard to the former Carlson parcel which necessitated the commencement of a quiet tide action to clear the tide which work was done by attorney Schrocppd. The Gille parcel, in addition to being tax tide property flowing from the State of Minnesota with its attendant legal appendages, was and is torrens tided. As you are aware, torrew tide is a completely separate recordation system that is sanctioned by the district courts in Minnesom and utilizes a separate recording system in the county recorders office. Because this Gille parcel was torrens in the midst of a townhouse development having abstract property cn both sides (the Katzmarek parcel to the west being abstract), the most logical course of conduct was to decertif}- the Gille parcel from the torrens system and City of Monticello Page Two May 7, 1997 return it to the abstract recording system as if left torrens over time would be overly cumbersome for future townhome owners, mortgagees, and the homeowners association causing all of those parties extraordinarily high recording fees every time an affirmative act was done that was going to affect title or any parties interest in the property. When preparing to commence the torrens district court action, we found there were lost documents from the closing between the city and Mr. Komarek which delayed setting the matter on for the hearing which finally occurred on March 30th. Under normal circumstances, that final hearing on March 30th would have been the termination of the torrens proceeding and the plat could have been recorded subject to other conditions of the HRA contract. However, since the torrens was being decertified, it never having been done in the history of Wright County, the torrens examiner after the hearing chose to further review court documents and has requested a second and final hearing, already having approved all final documents for that hearing which is scheduled to occur on June 22, 1997. Some of the delay of the initial hearing was due to the fact that one of the parties in title, Cortlen Cloutier, has subsequently deceased and his heirs had to be traced around the country as well as Mr. Gille's location who was finally located in Valley City, North Dakota. Further, on behalf of Cedrus, 1 wish to reaffirm for the benefit of the HR--\ that, in fact, the final plat has been approved by the City Council with the sole contingency being approval by the city engineer. There have been engineering plans promoted with regard to surface water that have involved numerous staff meetings and expense incurred by all parties with regard to the ponding issue including two 30 page hydrology reports prepared by two separate hydrologists that support a more user-friendly, park -friendly, environment -friendly approach to solving the ponding issue. To date, the city engineer has not responded Needless to say, my client has found the whole process more than frustrating. The issues have not been trying to cram more units into the subdivision but to make decisions with regard to livability of the green space over time. On a final note, I would like to emphasis that this has always been a team development approach to a redevelopment problem. Since last August, great strides have been made with the redevelopment site which has included the removal of the existing buildings and the creation in Phase I of over $1,000,000 of tax base which has created approximately $18,000 new tax revenue for the community. The tax revenue generated to date, though not being within the TEF district, is a total benefit to the extended community revenue base. Given the good faith efforts by all parties concerned, it would be the formal request of Cedrus Creek that the Contract for Redevelopment by amended to reflect a one 666 City of Monticello Page Three May 7, 1997 (I ) year extension of all performance dates in order for the contract documents to realign themselves with realities of the developmeat. Thank you for your anticipated cooperation. Respectfully. METCALF, LARSON & MUTK P.A By 'Bradley V.Amson John Komarek BVUgls i cc: Cedrus Creek Craftsman 66U AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT is made this day of , 1997, by and among the CITY OF MONTICELLO, MINNESOTA, a Minnesota municipal corporation (the "City"), THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR CITY OF MONTICELLO, MINNESOTA, a public body corporate and politic under the laws of Minnesota (the "Authority"), and CEDRUS CREEK CRAFTSMAN, INC., a Minnesota corporation (the "Redeveloper"). WHEREAS, the Authority, the City and the Redeveloper entered into a Contract for Private Redevelopment dated July 3, 1997 (the "Contract") regarding redevelopment of the Redevelopment Property described in Exhibit A attached hereto; and WHEREAS, the Contract has been amended on December 4, 1996 and January 13, 1997 to alter the time for completion of certain actions; and WHEREAS, the parties have determined a need to further alter the completion schedule and enter into this amendment. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. The parties agree and understand that the Closing Date as defined in the Contract was July 3, 1996. 2. In Section 3.9 of the Contract regarding tax increment assistance to the Redeveloper. the opening paragraph and subsection (a) are modified as follows: In addition to the assistance described in Section 3.8, the Authority shall pay to the Redeveloper 5;65,000 (the "Principal Amount") together with interest thereon at the rate specified below (the "Semi -Annual Payments") pursuant to the terms and conditions of this Agreement, including without limitation the following terms and conditions: (a) Interest shall accrue on the unpaid Principal Amount at the rate of 0% per annum from the Closing Date until May 31. 1997, and at the rate of 8.5% per annum, from June I. 1997 thereafter. Section 3.9 is further modified to provide that the first Payment Date is August 1, 2000 and the final Payment Date is February 1, 2021, and those dates are substituted wherever the dates "August 1, 1999" and "August 1, 2018," respectively, are used in Section 3.9. 3. Section 3.10 of the Contract regarding recovery of Authority costs is modified to provide that the first Payment Date is August I. 2000 and the final Payment Date is February I. 2016, and those dates are substituted wherever the dates "August 1. 1999" and "August I, 2012: respectively, are used in Section 3.10. e.rei»., 101110.01r 508b 4. Exhibit F of the Contract is revised as shown in Exhibit F attached hereto. 5. In Section 4.1 (a) of the Contract, the definition of Phase I is revised to read as follows: (a) "Phase 1" means the construction of a total of 10 Townhouse units in the TIF District as follows: (i) 4 twinhome Townhouse units by no later than December 31, 1998; (ii) 4 additional fourplex Townhouse units by no later than December 31, 1999; and (iii) 2 additional fourplex Townhouse units by no later than December 31, 2000. 6. The first paragraph of Section 4.3 of the Contract is revised to read as follows: Subject to Unavoidable Delays, the Redeveloper shall commence construction of Phase I by July 1, 1998. Subject to Unavoidable Delays, the Redeveloper shall complete the construction of Phase 1 by the dates set forth in Section 4.1(a). Subject to Unavoidable Delays, the Redeveloper shall complete the construction of Phase 2 by December 31, 2002. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the City. 7. Section 4.5 of the Contract is modified to provide that the final plat of the Redevelopment Property must be approved and recorded by April 1, 1998. 8. The parties agree and understand that the Assessment Agreement referenced in Section 6.7 has been executed but not yet recorded as of the date of this Agreement. The Assessment Agreement shall be modified to reflect the changes in construction schedule described in this Agreement. shall refer to the platted legal description of the TIF District, and shall be recorded upon filing of the plat - 9. The Redeveloper agrees to reimburse the Authority for all legal and financial advising costs incurred by the Authority in connection with this amendment to the Contract. The Redeveloper shall pay such costs within 10 days after receipt of an invoice therefor from the Authority. 10. This Agreement supersedes all prior amendments to the Contract. The Contract remains in full force and effect and is not modified except as expressly provided herein. N177�I1 2 Or IN WITNESS WHEREOF, the City and the Authority have caused this Agreement to be duly executed in their names and on their behalf and their seals to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf as of the date first above written. CITY OF MONTICELLO, MINNESOTA By Its Mayor By Its City Administrator STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of , 1997 by William Fair and Rick Wolfsteller, the Mayor and City Administrator of the City of Monticello, Minnesota. on behalf of the City. J Notary rUblIC In 11! Taira n. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA By Its Chair By Its Executive Director STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of ,1997, by Brad Barger and Olive Koropchak. the Choir and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, on behalf of the Authority. Notary Nubuc &Mt1,... Oita•M s6G CEDRUS CREEK CRAFTSMAN, INC. By Its STATE OF MIINNESOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of 1997 by John Komarek, the President of Cedrus Creek Craftsman, Inc., a Minnesota corporation. on behalf of the corporation. Notary Public This Document was drafted by: KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota 53402 sal" arau.0 3 S8 M LXH BIT F r ARTICLE III PAYMENT TABLE Redeveloper Pavment Date Authority Retention Semi -Annual Payment August 1, 2000 2,345 11564 February 1, 2001 2,345 1,564 August 1, 2001 4,495 2,997 February 1, 2002 4,495 2,997 August 1, 2002 5,316 3,544 February 1, 2003 5.316 3,544 August 1, 2003 5,316 3,544 February 1, 2004 5,316 3,544 August 1, 2004 5,316 3,544 February 1, 2005 5,316 3,544 August 1, 2005 5,316 3,544 February I, 2006 5,316 3,544 August 1, 2006 5,316 3,544 February I, 2007 5,316 3,544 August 1, 2007 5,316 3,544 February 1, 2008 5.316 3,544 August 1. 2008 5,316 3,544 February 1, 2009 5,316 3,544 August 1, 2009 5.316 3,544 February 1, 2010 5,316 3,544 August I. 2010 5,316 3,544 February I. 2011 5,316 3,544 August 1. 2011 5,316 3,544 February 1. 2012 5,316 3,544 August I, 2012 5,316 3,544 February 1, 2013 5,316 3,544 August 1, 2013 5,316 3,544 February I, 2014 5,316 3,544 August 1. 2014 5.316 3,544 February 1. 2015 5,316 3,544 August 1, 2015 5,316 3,544 February 1, 2016 4,930 3,930 August 1. 2016 0 9,844 February 1, 2017 0 9,844 August 1, 2017 0 9,844 February I, 2018 0 9,844 August 1, 2018 0 9,844 eaerrr�er F•1 �ma�e•ra Redeveloper Payment Date_ Authority Retention Semi -Annual Payment February 1, 1019 0 9,844 August I, 2019 0 9,944 February 1, 2020 0 9,844 August 1, 2020 0 9,844 February 1, 2021 0 5,361 F-2 �� May 9, 1997 City of Monticello 011ie Koropchak City Hall P.O. Box 1147 Monticello, MN 55362-9245 MN 190-00054: Prairie West Project (Komarek) Invoice# 13873 Through April 30,1997 For All Legal Setvioes As Follows: 04/04/97 SJB Phone call with 0. Koropchak re contract; draft 1.00 134.00 default notice 04/23/97 SJB Phone call with 0. Koropchak re Prairie West 0.40 53.60 matters 04/30/97 SIB Phone call with 0. Koropchak re contract 0.25 33.50 enfomement/planing issues Total Services: $ 221.10 For All Disbursements As Follows: 04/04/97 Fax 1.00 Total Disbursements: S 1.00 Total Services And Disbursernents: S 222.10 d13.yc�sa0 �.oyo Odwo. udo payM d tw 0 vrs 40=rC dWo or domed oWMrd" c w4vowprt a 41r bM pa%L 0910" d CWNFAM KENNEDY a GRAVEN aurnnd 200 South Shah SM14 Sub 470 '`lam Kmrt**MN 55402 (612) 337-93010 May 9, 1997 City of Monticello 011ie Koropchak City Hall P.O. Box 1147 Monticello, MN 55362-9245 MN 190-00054: Prairie West Project (Komarek) Invoice# 13873 Through April 30,1997 For All Legal Setvioes As Follows: 04/04/97 SJB Phone call with 0. Koropchak re contract; draft 1.00 134.00 default notice 04/23/97 SJB Phone call with 0. Koropchak re Prairie West 0.40 53.60 matters 04/30/97 SIB Phone call with 0. Koropchak re contract 0.25 33.50 enfomement/planing issues Total Services: $ 221.10 For All Disbursements As Follows: 04/04/97 Fax 1.00 Total Disbursements: S 1.00 Total Services And Disbursernents: S 222.10 d13.yc�sa0 �.oyo Odwo. udo payM d tw 0 vrs 40=rC dWo or domed oWMrd" c w4vowprt a 41r bM pa%L 0910" d CWNFAM I KENNEDY a GRAVEN 200 SaAi Shah Smef, Uft 470 MBmawk KN s5402 (612) 337.9300 May 9, 1997 City of Monticello 011ie Koropchak City Hall P.O. Box 1147 Monticello, MN 55362-9245 MN190-00062: Fay -Mar Expansion Invoice/i 15781 Through April 30, 1997 For All Legal Services As Follows: 04/14/97 DIG Revise contract and cover letter to 011ie re same 0.20 21.00 04/28/97 DJG Review Fay -Mar attorney's comments 1.30 136.50 Total Services: S 157.50 Attorney Summary Daniel 1 Greensweig 1.50@ 105.00/hr 157.50 For All Disbursements As Follows: 04/02/97 Postage 2.80 04/04/97 Photocopies 11.20 04/04/97 Fax 3.50 Total Disbursements: $ 17.50 Total Services And Disbursements: $ 175.00 di3,40"'3C"4° a". www PWWXV of tow Wd W"d am 00 no Pot er t 11r bm pK sy1.e.. a Cmn+or KENNEDY at GRAVEN Ord 200 South Sbmh Snq% Sulo 470 �a Mhmemdb, MN 55402 (612)337.9300 May 9, 1997 City of Monticello 011ie Koropchak City Hall P.O. Box 1147 Monticello, MN 55362-9245 MN 190-00041: Redevelopment - General Invoice it 15780 Through April 30, 1997 For All Legal Services As Follows: 04/02/97 SJB Phone call with 0. Koropchak re various TIF and 0.30 40.20 redevelopment questions 04/28/97 SIB Phone call with 0. Koropchak re various 0.30 40.20 redevelopment and TIF issues 04/30/97 SJB Phone call with 0. Korpochak reprinting company 0.25 33.50 development Total Services: S 113.90 Total Services And Disbursements: $ 113.90 3040 t d -W& WW PW'* as w Ohl A a1Wn«a.ae�e •` .derle aline, sbw.d Monticello HRA PO Box 1147 Monticello MN 55362-9245 May 13, 1997 M1C100-01 GENERAL Hours Amount 4/4/97 MTR Oiscussbns wIth OOfe 0.25 26.25 Total Due This Math: 0.25 $26.25 Prevbus Balm=: $774.62 4/16197- Payment -thW* you ($774.62) Total Balance Due: 526.25 EHLERS AND ASSOCIATES, INCJPUBLICORP INC. 2950 NORWEST CENTER 90 SOUTH SEVENTH STREET MINNEAPOLIS, MN 55402