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HRA Minutes 06-12-1991 . . . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, June 12, 1991 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Smith, Everette Ellison, and Tom St. Hilaire. MEMBERS ABSENT: Lowell Schrupp STAFF PRESENT: Ollie Koropchak GUESTS: Brad Larson, West Prairie Partnership Pat pelstring, BDS, Inc. 1. Call to Order. Chairperson Al Larson called the HRA meeting to order at 7:10 PM. 2. Consideration to Approve the May 1, 1991 HRA Minutes. Tom St. Hilaire made a motion to approve the May 1, 1991 HRA minutes, seconded by Everette Ellison, and with no comments or corrections the minutes stand approved as written. 3. Consideration to Hear Potential Redevelopment Area Option Inclusive of the West Praire Partnership and Gille property. Mr. Brad Larson with the West Prairie Partnership appeared at the HRA meeting upon the request from City Council for HRA input on the potential swap of properties. The Council being aware of the HRA' s interest to clean-up the area (Gille property) in close proximity to the 2.5 acres owned by the Partnership and in consideration of the potential land swap, wanted to know if the 2.5 acres would serve as a beginning piece of the puzzle for any future HRA redevelopment plans. Mr. Larson explained that the partnership has acquired interest in the Marvin George property (Outlot A, other parcel in potential land swap) which is in tax foreclosure. Assessments and taxes against the property are between $500,000 to $600,000 including delinquent penalties, interest, etc. In 1978, the construction cost for the public improvements was $280,000. Originally, the partnership presented the city with a plan for residential development on the 16.7 acres; however, the city declined the plan as the property is zoned R-3 (Medium Density Residential), the plan called for a non-permitted amount of driveways onto a collector road (Country Club Road), and the city needed an area for ponding. . . 4. . HRA Minutes 6-12-91 Thereafter, the partnership offered the city the partnership's currently owned 2.5 acres along West County Road 75 and the east 6.7 acres of Outlot A for ponding in even exchange for the west 10 acres of Outlot A for future multi-residential development and the right to maintain rental collection from the freeway sign(s). HRA members inquired of the partnership's interest to acquire Outlot A for $250,000 or $300,000 and dedicate to the city the 6.7 acres for ponding, and the partnership retain their 2.5 acres along Cty Rd 75. Mr. Larson responded the partnership wouldn't be interested because there is no market for multi-residential development in Monticello presently and potentially not for another five years. Mr. Larson responded the partnership wouldn't be interested in a $200,000 acquisition cost as they are not interested in a cash deal and the city may not be interested either as no appraisal has been completed. Mr. Pe1string reminded the HRA members that the real question here is the value of the 2.5 acres to the HRA for any potential redevelopment of the area with its close proximity to the Gille property. Koropchak questioned whether the inclusion of the 2.5 acres in addition to the Gille property would then qualify for a Redevelopment TIF District. The HRA remained firm in that they consider the Gille property as a liability and they expect the property to revert back to the city in the near future. Tom St. Hilaire made a recommendation to the City Council that the city obtain an appraisal on Outlot A to establish the land value and the HRA agreed with the City Council's lack of interest or desire of an even land swap between the partnership and the city. Mr. St. Hilaire's recommendation was a consensus of the HRA members. Consideration to adopt a resolution for modification of the Redevelopment Plan re1atinq to Redevelopment proiect No.1, the modification of TIF Plans relatinq to TIF District Nos. I- I throuqh 1-12, and the approval and adoption of the TIF Plan re1atinq to TIF District No. 1-13, all located within Redevelopment proiect No.1. Koropchak reported that the executed Letter of Intent as drafted by the City Attorney and a commitment fee of $5,000 have been received from Shingobee, Inc., and the preliminary building and site plans have been reviewed and adopted by the City Building Inspector and OSM. A copy of the land commitment between the developer and the Oakwood Partnership is yet to be received. The HRA inquired of the risk to the HRA or the city, actual risk to the city is virturally none as the commitment fee of $5,000 should cover the cost for BDS, .-~ . HRA Minutes 6-12-91 Inc. (agreed to one-half their normal $3,600 fee) for preparation of the TIF Plan and District, and other costs will include the preparation of the Development Agreement and publication of public hearing notices. If the project is not successful (no qualified leasee is found within one year) the developer's commitment fee will cover the preparation costs and if the project is successful the commitment fee will be returned to the developer and the preparation fees are then covered within the TIF Budget. Pat Pelstring reminded t~ HRA that the major renegotiation issue of no leasehold improvement costs to a leasee were resolved and the leasehold improvement costs are now incorporated wi thin the TIF Budget as project costs. The financial method is pay-as-you-go, therefore, the city will not bond for the project. The maximum rental reduction cost is $.90 per square foot with a suggested allowance of $.15 per square foot for the TIF or HAC A Penalty, this leaves an actual rental reduction to the 1easee of $.75 per square foot which should be incorporated into the Development Agreement. . Torn St. Hilaire made a motion to adopt the resolution for modification of the Redevelopment Plan relating to Redevelopment Project No.1, the modification of TIF Plans relating to TIF District Nos. 1-1 through 1-12, the approval and adoption of the TIF Plan relating to TIF District No. 1- 13, all located within Redevlopment Project No. I, and requesting the City Council call for a public hearing date of July 22, 1991. The motion was seconded by Ben smith and without further discussion the motion passed unanimously. 5. Consideration to set a policy to recapture the HACA Penalty Payment for Shinqobee, Inc. District with recommendation to the City Council. Based on Mr. Pelstring recommendation, Everette Ellison made a motion to incorporate into the Development Agreement between the HRA and shingobee, Inc. that the HAC A Penalty be the responsibility of the developer which is allowable and accountable within the maximum $.90 per square foot assistance of TIF Plan and Budget. Tom St. Hiliaire seconded the motion and without further dicussion the motion passed unanimously. 6 . Consideration to review an Updated Report on the TIF Reserve Funds as prepared by BDS, Inc. . Pat Pelstring informed the HRA that he recently received the information from Wright County necessary to prepare the detailed report on TIF reserves. The report will be submitted for the July meeting. . . . HRA Minutes 6-12-91 7. Consideration of an updated report on Aroplax and Maid of Scandinavia. Koropchak reported that the City Council approved the TIF Plan and District No. 1-12 for Arop1ax and she anticipates EDA review and approval for the GMEF this month. President Dahlquist of Maid of Scandinavia was definitely interested in a Performance Purchase Agreement for acquisition of the HRA-owned industrial lot. He has received the topography maps and contact information on the Ron and Lee Johnson property. Koropchak is to contact him after the 4th of July. 8. Other Business. None. 9 . Adiournment. The HRA meeting adjourned at 8: 10 PM by censensus of its members. ~ \<(J10 .~~~ Ollie Koropchak, HRA Executive Secretary ~,