HRA Minutes 12-06-1989
.
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, December 6, 1989 - 7:00 PM
City Hall
MEMBERS PRESENT: Chairperson Al Larson, Everette Ellison,
Ben Smith, and Tom St. Hilaire.
MEMBERS ABSENT: Lowell Schrupp.
STAFF PRESENT: Ollie Koropchak
GUEST: Pat Pelstring, BDS, Inc.
Russ Martie, TIF Applicant
1. CALL TO ORDER.
Chairperson Al Larson called the HRA meeting to order at
7:15 PM.
2. APPROVAL OF THE NOVEMBER 1, 1989 HRA MINUTES.
.
Ben Smith made a motion to approve the November 1, 1989
HRA minutes, seconded by Everette Ellison, the minutes
stand approved as written.
3. CONSIDERATION TO REVIEW THE USE OF TIF AND BUILDING
PLANS FOR THE RUSS MARTIE PROJECT.
Mr. Martie presented the HRA with preliminary plans for
his proposed commercial display/cold storage structure
in Oakwood Industrial Park. Plans include a 7,128 sq
ft metal structure of which 2,268 sq ft are for
commerical display/office and 4,860 sq ft are for
cold storage with the commerical sales display to the
north and storage/loading dock to the west and east.
Mr. Martie has a contact for deed on the property
and has completed grading with elevations two feet
above Dundas Road. The retail products consists
of pet supply, Cargill supplies, grass seeds, power equipment, seed
corn, salt, wood shavings, grains, etc. His present
location along Highway 25 is 4,400 sq ft with a
lease expiration of May 1, 1990.
When asked by HRA members if the project would proceed
without TIF assistance, Mr. Martie indicated the project
would go on without TIF assistance, "Yes, it has to." The
number of new jobs is two. Additionally, Mr. Martie
indicated that during harvest months the facility may be
used for grain cleaning.
.
Estimated projections showed a max up-front TIF assistance
of $11,000 over 8 years for write-down of land. The HRA
was concerned about their policy of assistance for non-
competitive commerical businesses which previously has
.
HRA Minutes - 12/6/89
Page 2
3. CONTINUED.
been used for assistance of public improvements assoicated
with a project. Secondly, the HRA was concerned about
the aesthetic view of the industrial park which has been
noted by recent potential new industries.
.
The HRA asked Mr. Martie about the potential of constructing an additional
48 feet to the storage area or an increase of 2,592 sq ft
to building project, as Mr. Martie had in earlier discussion
indicated as a potential option. Mr. Martie responded
that the payback would be good and would further increase
jobs by two part-time yearly employees. With the additional
2,592 sq ft storage area to increase the ratio of warehouse
for agricultural products compared to commerical display area, increase of
EMV, and with the further increase of two part-time yearly
employees, Mr. Pat Pe1string suggested the HRA consider
the pay-as-you-go TIF option for Mr. Martie, as Russ
indicated financing wasn't a problem, at an assistance
level of $2,500 annually over 7 years or total of
$17,500. The HRA further recommended proper screening for
the storage and outside storage areas to reserve the
industrial park aesthetic value. Under this analysis, Mr.
Pelstring viewed this as a small good project which works
well for both the HRA and Mr. Martie and assists a
local small business to expand through the use of a cash
flow TIF option.
Everette Ellison made a motion authorizing Mr. Pat Pelstring
to draft a TIF Plan for distribution to the school district,
hospital, and county commission by December 22, 1989, author-
izing an HRA public hearing date for the disposition of
land on January 3, 1990. The TIF plan to assist the developer
with the pay-as-you-go option of $2,500 annually for seven
years or a total of $17,500 for land write down based on
a total 9,720 sq ft metal building of which 2,268 sq ft comm display/office
and 7,452 sq ft warehouse for agricultural products. Additionally,
proper screening must be placed in the storage and outside
storage areas to reserve the industrial park aesthetic value.
The motion was seconded by Tom St. Hilaire and passed 4-0.
4.
CONSIDERATION TO REVIEW THE DAVID FICEK'S REDEVELOPMENT PROJECT.
.
Mr. pelstring informed the HRA of the meeting results between
Mr. Ficek, Koropchak and himself which had outlined the HRA
recommendation for no rental/investor units in Phase I and
the concern of property owner contact by Mr. Ficek. Mr.
Ficek's initial request for TIF assistance was projected at
$350,000-$400,000. However, preliminary numbers ran by
BDS, Inc. indicated at assistance in the area of $250,000.
After the meeting between Pelstring, Ficek, and Koropchak;
Jerry Shannon ran preliminary numbers based on all units
in Phase I and II on class rate for residental home-
stead property, although the Phrase II was anticipated
.
HRA Minutes - l2/6/89
Page 3
4. CONTINUED.
as rental/investor units by the developer. The level of assistance
with the completion of Phase I and II as of January 2, 1992 was
up-front $250,000. Projected increment beginning 1993 is $32,482
annually. Any excess increment from rental classification rate
could be used as a pay-as-you-go option to the developer.
Mr. Pelstring recommended Planning Commission reviewal for the
multi-family rental units in Phase II and recommneded the HRA
not execute the Letter of Intent until Mr. Ficek has met
with the property owner for potential willingness to negotiate
a land sale and establish developer's costs.
The HRA recalled their original concept and objective of this
project to eliminate blight and create quality townhouse (ownership)
housing for the elderly (55 or above but not limited to)
in Phase I site location.
Mr. Pelstring felt Mr. Ficek would still remain interested in
the project with TIF assistance of $250,000 for Phase I and II own-
er occupied units, however, he would be disappointed.
.
Tom St. Hiliare made a motion recommending Phase I and II be owner
occupied and the level of TIF assistance to be the $250,000 up-front
option, this to be more consistent with the HRA's original project
concept. Everette Ellison seconded the motion and without further
discussion the motion passed 4-0.
5. CONSIDERATION OF AN UPDATE AND REVIEW FOR THE USE OF TIF FOR
THE REMMELE ENGINEERING PROJECT.
Koropchak updated the HRA on the proposed Remmele project:
initial 20,000 sq ft with 50 employee (semi-skilled and
skilled) with footings for a total 60,000 sq ft building
anticipated within 3 to 5 years and an additional 100
jobs. If a Monticello site location is picked they
would use TIF pay-as-you-go option. Competitive site
locations are Elk River and Big Lake. A December decision
is expected.
Tapper, Inc. is planning for a December decision on their
proposed 20,000 sq ft building with 5,000 mezzanine and
50 jobs. They proposed level of assistance would he the
TIF up-front option. The HRA is on record as preliminary
TIF assistance concept approval for the two above named projects.
.
Cardinal IG will present to their Board of Direc_tors in January
1990 for approval to expand or relocate their West Lake Street
Plant thereafter will Mr. Renato Lizardo procede with site
locations.
HRA Minutes - 12/6/89
Page 4
.
6. CONSIDERATION OF AN UPDATE AND DISCUSSION OF THE POSSIBLE
PURCHASE OF THE GILLE PROPERTY.
This item appeared on the HRA agenda because Mr. Gille contacted
Koropchak inquiring of the HRA's interest to purchase his
property located on West County Road 75 (Zoned R-2). One
parcel is approximately 2.6 acres with an asking price of
$90,000 and the second parcel of approximately 1.2 acres
with an asking price of $80,000. Mr. Gille would grant
the HRA permission to enter his property for soil testing.
Previously, the HRA had advised Mr. Hayes, Jeff O'Neill, and
Gary Anderson to continue enforcing the City Ordinance
(illegal use of a non-conforming use). Mr. Pelstring
informed the HRA that his estimate of HRA excess increment is
$400,000.
.
The HRA views the Gille property as a liability and not as an
asset because of the underground storage tanks and possible
soil contamination. Because of no interested developer and
time being in favor of the HRA, Al Larson made a motion to
table the item and requested City staff and Mr. Hayes continue
enforcing the City Ordinance. The motion continued that
upon the HRA receiving a certification letter from Mr. Gille
stating that the property was no longer a liability
(underground storage tank and soil testing completed) the
HRA would then consider assistance with marketing the
property. The motion was seconded by Everette Ellison
and with no further discussion passed 4-0.
Prior to the motion, Mr. Pelstring had suggested the HRA
consider providing TIF assistance for one-half the soil
testing costs or $2,500 and assist with marketing the
property or offer assistance to a new developer.
7. CONSIDERATION OF HRA MEMBERS FOR HRA APPOINTMENTS FOR THE
YEAR 1990.
Ben Smith made a motion recommending to the City Mayor for
Council approval the following HRA members and their expiration
term dates.
Ben Smith
Tom St. Hilaire
Everette Ellison
Al Larson
Lowell Schrupp
December 1990
December 1991
December 1992
December 1993
December 1994
Everette Ellison seconded the motion and without further
discussion passed 4-0.
.
.
8. OTHER BUSINESS.
None.
9. ADJOURNMENT.
The HRA meeting adjourned at 9:15 PM.
~ '\(d\.o~~
Ollie Koropchak, HRA Executive Secretary
.
.
HRA Minutes - 12/6/89
Page 5