HRA Minutes 09-06-1989
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday. September 6. 1989 - 7:00PM
City Hall
MEMBERS PRESENT: Chairperson Al Larson. Ben Smith. Tom St. Hilaire.
Everette Ellison. and Lowell Schrupp (late).
STAFF: Jeff O'Neill. Rick Wolfsteller. and Ollie Koropchak.
GUEST: Jerry Zimmer and Pat Pelstring.
1. CALL TO ORDER.
Chairperson Al Larson called the HRA meeting to order at
7:05PM.
2. APPROVAL OF THE AUGUST 2. 1989 HRA MINUTES.
Chairperson Al Larson made one addition to the August 2. 1989
HRA minutes. Item 10. Consideration to Review and Discuss the
Billing Statement from Business Development Services. Inc.
addition to include that the HRA would like to be advised
up front as to when BDS. Inc. billing clock begins to run on
individual projects other than TIF projects.
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Ben Smith made a motion to approve the amended August 2. 1989
HRA minutes. seconded by Everette Ellison. Passed 4-0.
3.
CONSIDERATION OF A NSP PRESENTATION AND REVIEW OF FINAL PLANS.
Mr. Jerry Zimmer of the NSP St Cloud Region Office informed
the HRA of the 5.124 square foot maintenance building to
be constructed in the Oakwood Industrial Park. construction
to begin within days. The building will include a small
office and have six garage stalls. with employment of
eleven. The maintenance building serves the areas of
Monticello. Big Lake. Becker. Rogers. St. Michael. Hanover.
and rural Dayton. Storage will consist of poles. wire.
street lights and some transformers. and be screened with
a cyclone fence. Chairperson Larson thanked Mr. Zimmer
for his time and presentation.
4. CONSIDERATION TO HEAR A PRELIMINARY CONCEPT FOR USE OF TIF
FOR COSTS ASSOCIATED WITH THE GILLE PROPERTY.
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Jeff O'Neill informed the HRA members that the city has taken
a pro active approach on the Gille property stating that
Gille's Auto has an illegal auto license. constitutes
blight and public nuisance. and is in violation of the
City Zonin~ Ordinance (expansion of an existing non-
conforming~slnce 1976). The City has two options:
1) Enforce City Ordinance or 2) for the City or HRA
to work with the property owner on a relocation site and
to research land and soil correction costs. The HRA
could seek land permission entry from the owner for soil testing and
substract the testing costs from the land-acquisition cost."
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HRA Minutes 9/6/89
Page 2
4. CONTINUED.
The HRA recalled when Mr. Metcalf appeared before the HRA
about a possible multi housing project in that area and the resistence
from the neigbhorhood. It was projected that the increment
generated from single housing wouldn't cover the anticipated
project costs. The HRA felt it was the sellers responsibility
to disclose of any underground tanks to a buyer. The HRA
requested City Staff to confirm seller/buyer responsibility of
disclosure. check on state funds available for clean-up. and
investigate the time frame for development of a PCA plan
for abandon tank removal. The HRA members recommended that
Jeff O'Neill. Gary Anderson and the City Attorney continue
applying pressure on Gille's Auto for the violation of
the City Ordinance (expansion of a non-conforming use since
1976). The HRA concluded that this was not the time for HRA
involvement however wants to be kept informed. The HRA
hasn't turned down the project.
5.
CONSIDERATION OF AN UPDATE ON MANTEQ INTERNATIONAL. INC.
(BOYLE PROPERTY).
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Pat Pelstring informed the HRA that he has spoke with Stewart
Wilson regarding the uncompleted business plan and the updated
financial statements. Plans were to meet the October Omni
financial meeting. Norman Strand indicated that Manteq
plans do include expansion to Monticello. Koropchak indicated
a letter was mailed to Mr. Boyle of the TIF requirements and
the HRA position for a County recorded copy of the subdivision
and the need for a drainage plan. Other builders have been
contacted for alternative sites.
6.
CONSIDERATION TO REVIEW SITE LOCATIONS FOR DAVID FICEK PROJECT.
Pat Pelstring responded to David Ficeks Master Plan which
included four districts and recommended the HRA commit to
only Area A. Mr. Ficek researched the market price with
a conclusion of $60.000=$80.000. He is researching the
possibility of continued vacant property further to the
east for project feasibility. Mr. Pelstring would need
to verify the area as a qualified Redevelopment District.
Koropchak informed the HRA that some 500 surveys were mailed
out and a first look of a good return. Mr. Ficek will tabulate
the survey and present the HRA with a copy of the results.
Mr. Ficek needs to develop a site plan and acquisition/
redevelopment costs for HRA review.
7.
CONSIDERATION OF AN UPDATE FOR THE EXPANSION OF SEVENTH STREET.
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Jeff O'Neill informed the HRA members that The Lincoln Companies
has a signed letter of intent from K-Mart but no signed lease.
City Council has two alternative for the seventh street aligment.
One. original plan of a curved road aligment and second. a
straight road alignment with a estimated $200.000 acquisition
cost for an additional approximate 50.000 sq ft of retail/
HRA Minutes 9/6/89
Page 3
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7. CONTINUED.
commercial development. The Lincoln Companies can live with
either alignment, however, K-Mart has not approved
parking spaces constituted by either road alighment. Lincoln
does agree that the larger retail/commercial lots to the
west would encourage larger developments. Staff pointed
the straight road alignment would also serve as a buffer
between the retail/commercial zoning to the south and the
PZM zoning to the north. The original road alignment
was approved by previous owner. Rosewood Corporation. and
not The Lincoln Companies.
Mr. O'Neill presented the HRA with the curved project costs:
Road to Minnesota Street, $l61.000; land value of Lincoln
Property, $43,000 plus excess land. $8,000 for a total
of $2l2,000., Straight project
costs: Road to Minnesota Street, $l5l,000; Pratt, l2,000
sq ft $61,000 (.57), Holthaus, 28,000 sq ft $56,320 ($2.00),
Demolition $3,000, subtotal $271,320 plus Kraemer l.9 acres
$197,000 ($1.41), Demolition $7,000, subtotal $204,000
for a total of $475,320.
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Mr. O'Neill suggested the HRA consider the use of TIF for
the acquisition of the Pratt. Holthaus. and Kreamer properties
plus demolition costs for a total of $307,320 less the
land sales of Kraemer ($70,000) and Holthaus ($17,000) for
net cost of $237,320. Road construction would be assessed
the benefitting property owners. Mr. Pelstring suggested
the land owners negotiate with their renters for a
signed renters compensation agreement for hardship or
relocation cost.
The HRA felt the benefitting developer could purchase the
Holthaus and Pratt property (plus demolition) and put the
road in and still recover the approximate $235,000 ($233,250)
through the K-Mart and future larger commercial developments.
The HRA was not convinced that the proposed $307.320 cost
for the acquisition of land could be justified or
recovered by the HRA in exchange for an approxiate addition
of 50,000 sq ft of land. Staff was unable to put a
dollar value on the anticipated future larger developments.
Staff indicated the project was the straight road alignment,
a public purpose (public improvements) which would encourage larger
development of Monticello retail/commercial area which
the approximate annual $100,000 increment would retire the
debt service in 3-3! years. The Lincoln Companies project
would create some l65-l80 part time and full time jobs
and consist of 86,000 sq ft.
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HRA Minutes 9/6/89
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7. CONTINUED.
Additional commen~s by the HRA: City Council can establish a
TIF District, how would the HRA look, Lincoln Companies have
not indicated a no go on the project without the use of TIF,
acquisition for street improvements and assessment should be
handled under the normal city process, K-Mart lease decreases
and Lincoln Companies values and revenues increase, if
had choice would rather see a Target, do the right thing
up front, HRA is drivers seat, relatively small cost to
the City for curved road alignment.
Mr. Pe1string reminded the HRA that the key issue tonight
was to make a finance decision on the use of TIF as
Lincoln Companies anticipate a September 27 beginning
grading date. Staff informed the HRA that its suggested
recommnedation was not for direct assistance to the
developer,however, did agree it was an indirect assistance
which encourages the future retail/commercial development in
Monticello. Hopefully opening the City of Monticello
as a Regional Retail/Commerical Area.
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The HRA considered the TIF policies which determines the
project valuation. Out of the eight considerations:
4 were yes, 2 were no, and 2 were maybe.
The HRA recommended the benefitting property developer
(The Lincoln Companies) acquire the Holthaus and Pratt
properties and put in the Seventh Street straight road
alignment to Minnesota Street. Also, the HRA
recommended the use of TIF for the acquisition of the
Kraemer property ($197,000) with an anticipated land
resale of $70.000 to $100,000. The City then to assess
the benefitting property owner (Hornig) for street
improvements along Seventh Street with an approximate
cost to the tax payers (TIF) of $100,000.
8. OTHER BUSINESS.
Mr. Pelstring presented the HRA with a revised Agreement
between the HRA and BDS, Inc. The HRA tabled the item
to the next meeting.
9. ADJOURMENT.
Everette Ellison made a motion to adjourn the HRA meeting,
seconded by Tom St. Hilaire. The meeting adjourned at 10:30PM.
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Ollie Koropchak
HRA Executive Secretary