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HRA Minutes 11-06-1991 . . . MINUTES HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, November 6, 1991 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Schrupp, Everette Ellison, Hilaire. Smith, Lowell and Tom St. STAFF PRSENT: Jeff O'Neill and Ollie Koropchak. 1. CALL TO ORDER. Chairperson Al Larson called the HRA meeting to order at 7:00 PM. 2. CONSIDERATION TO APPROVE THE AUGUST 21, 1991 HRA MINUTES. Ben Smith made a motion to approve the August 21, 1991 HRA minutes. Seconded by Everette Ellison and without any corrections or additions, the minutes were approved as written. 3. CONSIDERATION TO DISCUSS FOR POSSIBLE AUTHORIZATION OF THE RECOMMENDATIONS MADE BY BDS/INC. ON THE TIF FINANCIAL ANALYSIS. Koropchak informed the HRA that the re-ran TIF Analysis Summary, with the inclusion of the $260,000 bond issuance for TIF District #2; decertification of TIF District #1 in year 1991; and less the 10% administrative expenses and 5% bond reserve, projected an excess increment of a little over one million dollars over the life of the existing eleven districts. Based on this analysis which includes the assumptions (less administrative expense and bond reserve), Mr. Pelstring recommended the HRA to consider development and implementation of a policy to transfer 10% of the total TIF project increment into an HRA revenue fund (Admininstrative Account) for distribution of expendi tures such as staff time and for additional marketing dollars. This 10% figure was originally included within the city's bond issues but no policy exists to transfer the funds from TIF to the HRA. If these funds are not expended by the HRA they would be avai lable for debt service. Secondly, Mr. Pelstring recommended the HRA consider development and implementation of a policy to establish a reserve level (5%) for future potential defaults and/or slow payments of taxes, thereafter, the remaining excess increment . HRA MINUTES 11-6-91 would give the HRA some opportunity to fund additional public improvement projects. Thirdly, Mr. Pelstring recommended the HRA negotiate a loan payback with the City for Lots 5 and 6, Oakwood Industrial Park. Principal amount $136,000 over 10 years at 8% interest would be an annual debt service of approximately $20,268. Through the analysis and the implementation of these policies, the HRA would maintain an accountability of the TIF excess increments and it would assist the HRA in planning for future desired projects or goals. The HRA members fel t the increase of 10% administrative revenue would only increase the administrative costs with no increase in productivity. The administrative revenue would cover staff time and consultants time for marketing Monticello prior to a Monticello site location commitment. It was the understanding of the members that the HRA paid for BDS, Inc. expenses only upon the preparation of the TIF Plan/District or when staff determined a specific marketing necessity. . The HRA is pleased with work by BDS, Inc., however, requested monthly billing statements rather than at random. Koropchak informed the HRA that the statements are itemized and she will provide a copy for HRA review. The HRA tabled any action on this agenda item and requested Mr. Pelstring be present to provide a clearer understanding of his recommendations. 4. CONSIDERATION TO DISCUSS FOR POSSIBLE RECOMMENDATION OF THE CHELSEA LAND USE AND CIRCULATION STUDY/CONCEPTUAL AREA PLAN. Jeff O'Neill told the HRA that the land use study was the resul t of concerns raised by Remmele and Tapper I s on the aesethetic value of the industrial park, the development of the school campus, the potential limited industrial space, and talks with property owners and the Planning Commission. The Chelsea storm sewer system study resulted from city staff's recommendation for an overall plan prior to further development of the Farm Credit property. . The professional planner I s land use map proposed the Farm Credit Proporty zoned B2, B3, and 1-1 to be Light Industrial/Business Campus and the northerly 80 acres of Kline Property to be Multi-Residential with the southerly 80 acres of the Kline property to be Single Residential. The HRA was shocked that the planner recommended the northerly 80 acres of the Kline property for mul ti-residential as they fel t the school and industrial property were more compatible and they did not feel people would not want to live next to a school. Currently, the city has approximately 200 acres of available industrial land and 400 residential lots for development. . HRA MINUTES 11-6-91 Based on the current pace of residential development it will take an estimated 10 years before full development of the residential lots occur. Mr. O'Neill stated the Business Campus zone has the same uses as the 1-1 zone. The ordinance does allow for metal buildings wi th one-half brick on all wall surfaces. Jeff further advised the members of the reduction in the original plan for a big commercial area in the area of Chelsea Road and County Road 118 which now is proposed as a smaller Neighborhood Commercial Center. Tom St. Hilaire made a motion strongly recommending the norther 1 y 80 acres of the KI ine Property be retained for industrial use. Seconded by Everette Ellison and wi thout further discussion the motion passed unanimously. The recommendation was made to assure that the city maintains an adequate amount of acreage for future industrial development with the natural continuation to the south of the industrial park. 5 . CONSIDERATION TO ESTABLISH 1992 HRA GOALS. . Tom St. Hilaire agreed to serve on the HRA for the five year term, his name will be recommended to the City Council for appointment by the Mayor and Council in January. The following 1992 HRA Goals were established: 1. To research the need and feasibility for senior quality townhome housing. (double garage, no stairs, 1,200 to 1,400 sq ft, $80,000 to $100,000, wi thin ci ty limits preferably close to commercial). 2. To research and earmark property for future development of such housing. (Suggestions were old Dino property, existing Redevelopment District #2, area of Ivan Anderson1s, or Broadway between Wright and Ramsey). 3 . To research the probability and to serve as a catalyst for the City Council to authorize forfeiture procedures against the Gille Property. (Invite Mayor Maus to the HRA meeting, research the City1s access of Super Fund monies for soil testing and soil contamination cleanup, check on Gille property tax delinquency status, invite Ci ty Attorney Paul Weingarden to the HRA meeting for information on forfeiture procedures, and request the Mayor and Ci ty Council to proceed wi th forfei ture of Gille property). . 4. To encourage and assist in the development of two industrial projects of similiar quality to Remmele and Tapper. . . . HRA MINUTES 11-6-91 6. CONSIDERATION OF AN UPDATE ON THE AROPLAX CORPORATION PROJECT. Koropchak advised the HRA that the City of Brooklyn Park has presented Mr. Jerry Schoen with a financial proposal. Although, the exact terms of the proposal are unknown, Mr. Schoen said the ci ty can finance the project. The Ci ty of Monticello has certified the TIF District for assistance in the write down of land and approved a $30,000 GMEF loan at 6.5 percent interest over seven years for machinery and equipment. The financial package also included an SBA loan and bank financing. Koropchak reported she asked the EDA to respond to Mr. Pelstring's suggestion to ask Aroplax, "What it would take for a Monticello site location commitment?" It was the feeling of the EDA that the Aroplax project was one which met the industrial recruitment objectives of the IDC, the HRA, and the EDA. Therefore, it was suggested to ask, what it would take to get the company to Monticello. Koropchak did remind the EDA that the GMEF policy states the funds are for gap financing and are not intented as a substitute for commercial financing. Aroplax had the option of three bank commitments. Mr. Pelstring met with Mr. Schoen on Tuesday, November 5th and proposed a financial package with the insertion of the Minnesota Economic Recovery Grant therebye reducing the debt service by approximately $15,000. He seemed interested, however, believes the land values in Brooklyn Park will maintain or increase its value over a long time. Yet, he also see the benefits to a Monticello location. He feels he has made no site location commitment. The HRA questioned whether he was playing with the City for additional funds. 7. OTHER BUSINESS. Koropchak informed the HRA that she had requested Mr. John Dean of Holmes & Graven to prepare a preliminary agreement between the HRA and a developer which basically ask the developer for upfront dollars to cover costs prior to the execution of a development contact therefore the HRA costs are covered if for some unknown reason the proposed project did not develop. The HRA agreed with the concept of the document. HRA MINUTES . 11-6-91 8. ADJOURNMENT. Al Larson made a motion to adjourn the HRA meeting, seconded by Tom St. Hilaire, the meeting adjourned at 9:00 PM. C5 ~ ~d\ ,,~~ Ollie Koropchak, H A Executlve Dlrector . . ....~