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HRA Minutes 11-07-1990 . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, November 7, 1990 - 7:00 PM City Hall MEMBERS PRESENT: Vice Chairperson Ben Smith, Lowell Schrupp, Everette Ellison, and Tom St. Hilaire. MEMBERS ABSENT: Al Larson. STAFF PRESENT: Ollie Koropchak. GUEST PRESENT: Bill Kemp, Helgeson Development Company, Inc. Barb Schwientek, M-BL Hospital Executive Director Pat Pelstring, BDS, Inc. 1. CALL TO ORDER. Vice Chairperson Ben Smith called the HRA meeting to order at 7:09 PM. 2. APPROVAL OF THE SEPTEMBER 5, 1990 HRA MINUTES. Everette Ellison made a motion to approve the September 5, 1990 HRA minutes, seconded by Lowell Schrupp, the minutes stand approved as written. . 3. CONSIDERATION TO HEAR CONGREGATE HOUSING CONCEPTS. Koropchak reported that Mr. Bill Kemp of Helgeson Development Company, Inc. was recommended by Hospital Executive Director Barb Schwientek because of her fam- iliarity with the company and it's creditability and reputation for marketing and development of congregate housing. Barb reiterated the Hospital Boards position regarding congregate housing: they are not willing to finance the project as the market survey of five years ago didn't indicate a demand for congregate housing at market rate and they couldn't justify the tax payers money to subsidize such a project. They would endorse a private devel- opment and would cooperate in providing the necessary services. . Mr. Kemp gave a brief background of the company stating the company has specialized in the senior housing market since 1975. They have completed projects totaling over 1,500 units in Minnesota, South Dakota, and Wisconsin. Handouts were presented to the HRA members consisting of a summary of the company's projects as of October IS, 1990; a summary of the development phases; and a list of long term care housing continuum components: independent living, congregate housing, assisted living, and nursing home. The company has a management fee for services including market analysis, architectural process, pre-construction and construction phase, and management in both development and ongoing phase. . HRA Minutes 11/7/90 Page 2 3. CONTINUED. The most affordable development in one of 40-60 units and are adjacent to or attached to a nursing home. Developer's cost per unit is $50,000, not inclusive of operational cost, the market rate for the one bedroom unit is $650 per month. Average age is 80-83, moderate income of $l5,OOO, and the key is the availablity of services associated with the complex. The Sartell complex has a chapel, whirlpool (not used), lounge, glassed in day care center, and is two story with elevator (cost effective), however, one story may market easier. Recommendation by Mr. Kemp was to determine a need for such housing in Monticello. Barb Schwientek said she would inquire of some updated market studies recently completed in Elk River. Ms. Schwientek again said the Hospital Board would be in favor of the project only if it was a private development. Currently there is a five to seven year moritorium on the establishment of new nursing home beds. Our local nursing home run.s ",t full occ.upancy. . Ms. Schwientek reported the through services provided by the Wright County Human Services, Adult Day Care Service, Home Delivered Meals, and the new Heartland Express Bus the elderly people of Monticello have the option to choose from several alternative services. Generally, people are reluctant to move out of their homes. Mr. Kemp said this kina of project is generally not privately owned because the project develops out of a need rather than for an investment. Some HRAs or other non-profit organizations are owners in communities which may quality the project as tax exempt. The Monticello HRA expressed they were not interested in ownership. However, Pat Pelstring advised the HRA that they can act as a developer by assisting with TIF to encourage private development. After Mr. Kemp's presentation which included photographs of several projects completed, a suggestion was made to visit the company's development in Sartell. The HRA agreed to proceed with the following steps: 1) Visit the Sartell housing complex, 2) obtain market study from Elk River through Barb Schwietnek, and then if need be 3) consider ownership options. . The HRA thanked Mr. Kemp and Ms. Schwientek for their time and presentation or information given to the members. . HRA Minutes 11/7/90 Page 3 4. CONSIDERATION OF FOLLOW-UP ON THE GILLE PROPERTY CONCEPT. Koropchak reported that she has attempted to contact Mr. Brad Larson for a follow-up report on the West Prairie Partnership progress. The partnership was to contact Mr. Gille and Katzmark for possible land negotiations and report back to the HRA with numbers to make the project work. It was suggested by the HRA to include the neighborhood property owners at the onset of development plans to encourage a positive cooperative project. Unable to make contact with Mr. Brad Larson directly, Koropchak received a message stating Mr. Larson would not be at the HRA meeting tonight. Censensus of the HRA was to have Attorney Tom Hayes draft a letter on behalf of the City to Mr. Fred Gille applying press regarding his delinquent taxes. CONSIDERATION TO HEAR IDC PLANS FOR AVAILABLE LEASEABLE INDUSTRIAL SPACE. 5. . Koropchak reiterated that in all due respect of the HRA's opinion of September that they felt the IDC's plan for pre-approval building plans and TIF Plan development was not very practical, she asked the HRA to hear of the updated information. Koropchak outlined the letter addressed to Mr. Schultz, which was not mailed, as the results of a meeting with Shingobee staff, Pat Pelstring, and herself. Pat Pelstring of Business Development Services, Inc. pointed out the major changes in the concept.' The major concept of this plan is the joint marketing partnership created between the IDC and a selected developer. It provides a concrete tangible marketing tool for both parties to exercise with an option of three building plans and availability of a new 1easeable facility within construction time (a reduction of 60 days on availability). The concept is a marketing issue not a financing issue. The TIF assistance will be the Pay-As-You-Go Plan, not intented to increase the developer's return but to serve as a reduction in rental costs for the leasee. Because of the soft construction market, Mr. Pelstring suggests a developers original commitment fee of $5,000 - $lO,OOO for the HRA's cost for development of the TIF Plan and Development Contract. . After some discussion the HRA agreed with the TIF/SPEC Building Proposal. Tom St. Hilaire made a motion recommending the HRA approve the IDC concept plan for a TIF/SPEC Building Proposal subject to Chairperson A1 Larson's input for approval. The HRA's original opinion th,~t the concept' plan wa~ _U?t:: ve~'~~_ __ practical was because of the cost to the HRA__ a~-tJ,1at - the building design pfans would not meet aprospeCt~s need. . HRA Minutes 11/7/90 Page 4 5. CONTINUED. The motion further stated a request for proposals be drafted, the IDC interview the contractors/developers and select a developer/contractor, selection criteria have strong emphasis on marketing partnership, and the original commitment fee be sufficient to cover the HRA costs. The motion was seconded by Lowell Schrupp and without further discussion the motion passed 4-0. 6. CONSIDERATION TO HEAR OF NEW PROSPECTS. . a) 1.2 million sq ft distribution center - this company would employ some 500+ and request the need for a minimum of 138 acres. The company would generate a miminum of 400 daily round trip truck traffic plus employees and their truck fleet. The name of the company remains confidential and the distribution center would serve the eastern Dakotas, Minnesota, Wisconsin, and the upper Michigan Peninsula. At present Monticello is one of nine communities having been visited by two company representative and a state official. Due to the large required acreage the four recommended Monticello site locations are outside the City limits. The company representatives are expected to return to Minnesota to view a couple of other locations along the eastern state border, thereafter, will communities be eliminated. b) Aroplax - this company was represented by a real estate agent and several months ago was looking for 20,000 sq ft of leaseable space. The company looked at the Wright County Bank property (known as the old Best-In-Webb), the business being of family ownership was split on a decision for a Monticello location versus a Lester Prairie location. Things have changed within the family and now the company is looking at owning their facility. High recommendations came from Bill Tapper and their general contractor, Henning Construction. The company is forty years old, currently has a metro location, would employ initially 20-25 people in the $7.00-$8.00 wage range, and is a plastic injection molding company. They are interested in a financial package. . c) Eastey Enterprises, Inc. - at present the company has not received bank financing for the SBA loan. The company had requested additional funds from the city's revolving fund and the Central Minnesota Initative Fund. The EDA won't review a GMEF application until after the company secures bank financing. . HRA Minutes 11/7 /90 Page 5 6. CONTINUED. d) Circuit Technologies, Inc. - this is a start-up company which is interested in leasing space and funding from the GMEF. They viewed the 7,200 sq ft bays of Jay Morrell which are accepted to their needs of 10,000 sq ft. The company would produce pro type multi layer circuit boards with a marketing plan on turn-around time (4-5 days). The company would employ 15 high tech personnel. The owners Leo Adams and Larry Corson attended the IDC Banquet. Presently Pat Pelstring is reviewing their business plan prior to any recommendations. e) Undisclosed Company - At this time the City has heard no word from the consulting firm who inquired of Monticello for a potential industrial siting. Koropchak has placed numerous calls to the consulting firm to obtain the statis of the industrial project, no response has been received. 7. OTHER BUSINESS. None. . 8. ADJOURNMENT. Tom St. Hiliare made a motion to adjourn the HRA meeting, seconded by Everette Ellison, the meeting adjourned at 9:10 PM. ~ ~Cl'vbQ.9. ~ Ollie Koropchak HRA Executive Secretary .