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HRA Minutes 08-01-1990 . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, August 1, 1990 - 7:00 P.M. City Hall MEMBERS PRESENT: Chairperson Al Larson, Lowell Schrupp, Tom St. Hilaire, and Everette Ellison (tardy). MEMBERS ABSENT: Ben Smith. STAFF PRESENT: Rick Wolfsteller, Jeff O'Neill and Ollie Koropchak. GUEST: Pat Pelstring, BDS, Inc. 1. CALL TO ORDER. Chairperson Al Larson called the August HRA meeting to order at 7:10 P.M. 2. APPROVAL OF THE JULY 11, 1990 HRA MINUTES. Lowell Schrupp made a motion to approve the July 11, 1990 HRA minutes, seconded by Tom St. Hilaire. the minutes stand approved as written. . 3. CONSIDERATION TO REVIEW THE CONTRACT BETWEEN THE HRA AND BDS, INC. Chairperson Larson stated the HRA and BDS, Inc. contract has been in existance since October 1989 and as a good business policy, contracts need to be evaluated periodically. Did problems exists in cooperation between either entity? What did the City benefit this year with or without the assistance of BDS, Inc.? The HRA members recognized that BDS had no part in the initial contact of recent developers, however, agreed that BDS played a significant role with the preparation and presentation of the financial proposals. An excellent presentation is a key factor for the community and is good advertisement, summarized one HRA member. The staff and HRA expressed some concerns on BDS's follow through work: Communications with developers and other parties involved with the financial package, turn around time on response of telephone calls, and what do certain billing charges cover. . Specifically, the staff discussed the Tapper's project and Tapper's frustration with the time for Federal/State funding approval and the difficulty in making contact with BDS personnel. Mr. Pelstring explained that the project was delayed because first) the Small Business Development Loan was denied which met the program criteria, however, in Mr. Pelstring's opinion was a judgement call made by one loan official. Secondly, the city's revolving loan fund term policy (5-7 years M&E) didn't meet the SBA Loan ~~9Uitemtnt as such, therebye, causing another delay. . HRA Minutes 8/1/90 Page 2 3. CONTINUED. Mr. Pelstring explained that BDS, Inc. has experienced rapid growth (eleven personnel) plus the partnership split leaving BDS with an insufficient amount of senior staff capabilities. With Mr. Pelstring's travel time, continued meetings, and forty to sixty calls per day doesn't allow him the time to return all telephone calls within 24 hours. Mr. Pelstring considers Monticello as one of his major clients. HRA members believe in quality not quantity. . Staff asked for an explanation for services covered in the $850.00 Development/Assessment Agreement. Mr. Pelstring responded the charges cover the negotiating time spend with a developer and city bond counsel to determine the minimum estimated market value, TI guarantee amount, letter of credit amount, etc. BDS charges $3,850 for the preparation and drafting of a TIF Plan and charges a $75.00 per hour fee for service after receipt of a letter of intent from a developer for preparation of SBA loans or time spend with David Ficek, as examples. However, Mr. Pelstring stated some of these costs are written into the SBA loan and EDA administration fees may be recovered under TIF. Tom St. Hilaire made a motion recommending the HRA and staff continue the contract with BDS and evaluated their performance in six months relating to the concerns of improved communications and returned telephone calls. Additionally, the billing charges should be defined to allow for a clearer understanding. The motion was seconded by Lowell Schrupp and with no further discussion passed 3-0. The HRA thanked Mr. Pelstring for his work on behalf of the City and felt the money expended to BDS was worth the successful recruitment of two quality companies. 4. CONSIDERATION TO HEAR PRELIMINARY CONCEPT FOR POTENTIAL USE OF TIF (ECONOMIC DISTRICT) FOR ERIC BONDHUS PROJECT. Everette Ellison arrived at the HRA meeting. . Koropchak reported on Lake Tool. The company is currently located at 22015 Industrial Blvd in Rogers where they lease a 4,200 sq ft facility. The company designs, engineers, and does custom tooling for injection molding. The company is four years old and is a partnership among three brothers. Eric Bondhus is a brother of John Bondhus. The company has six employees and does not plan to increase their employment immediately. The employees are comprised of four Bondhus brothers and two nephews. All machinery and equipment currently in-house is paid for (not vertified at this point). The company is looking to purchase their own facility. On July 17, Eric Bondhus and Rick Wolfsteller viewed the old Fire Hall, appraised at $93,000. . HRA Minutes 8/1/90 Page 3 4. CONTINUED. The building in a B-4 zone would require a conditional use permit. Jeff O'Neill and Koropchak visited the existing facility in Rogers on July 24. The company is interested in availability of financial assistances and a community with full amenties. The City has suggested the use of TIF for the acquisition of one of the city owned smaller lots (pay-as-you-go assistance) and discussed the GMEF loan. The company would construct a metal 5,000 sq ft office/design room and manufacturing facility. If an Economic District can be created under new Statutory law, is the HRA interested in the preliminary concept of the Bondhus project therebye recommending the use of TIF. The HRA recommended staff to pursue the recruitment of Lake Tool and the use of TIF for the acquisition of land (pay-as-you-go assistance) and secondly, to pursue the purchase of the old Fire Hall if so desired by the company. 5. CONSIDERATION OF RESEARCHED INFORMATION TO WHETHER THE GILLE PROPERTY AREA CAN QUALIFY FOR THE ESTABLISHMENT OF A TIF DISTRICT. . Koropchak presented the HRA with written information of the three Gille parcels and the Katzmarek parcel: '90 taxes, delinquent taxes, acreage and EMV, building size and EMV, special assessments, map of the outlined area, and criteria for the establishment of a TIF Redevelopment District. A 25 year Redevelopment District can legally be established as the parcel consist of necessary % of building which meet the blight test. The property is zoned R-2 (single and 2 family residents), with a conditional use permit a 4-plex or 8 unit townhouse is allowable. At this time, staff is unaware of an interested developer, Gille's property has at least one underground storage tank and delinqent taxes. Katzmarek's property is in the flood plain but buildable upon adequate elevation. Chairperson Larson informed the HRA that several people had inquired if the HRA was investigating the property as to the requirements for contaminated soils testing or to assist in finding a developer. City Administration felt the Katzmarek property would require condemnation before the owner would be willing to sell. . The HRA agreed that the property would be considered a blighted area and they would act as a facilitator to research the criteria necessary to give the property a clean bill of health. To research the required soil testing, the EPA testing methodology for a certified closure report, to check with Mr. Gille on his plans for selling and/or tank removal, and to assistance in finding an interested developer. The HRA is not interested as being a property title holder. . HRA Minutes 8/l/90 Page 4 6. OTHER BUSINESS. Mr. Pelstring advised the HRA and staff since the City of Monticello receives no state aid therefore no LGA and HACA payments are necessary on new created TIF Districts, the City can offer approximately 35% more TIF assistance than other communities which is a reverse from Monticello's low capacity rate generating an approximately 20% less amount of increment than other communities. 7. ADJOURNMENT. The HRA meeting adjourned at 8:50 P.M. ~'<d\O~J~ Ollie Koropchak HRA Executive Secretary . .