HRA Minutes 04-23-1992
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Thursday, April 23, 1992 - 7:00PM
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Ben
Schrupp, Everette Ell ison,
Hilaire.
Smi th, I.owell
and Tom St.
STAFF PRESENT:
Jeff O'Neill and Ollie Koropchak.
STAFF ABSENT:
Rick Wolfsteller.
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00 PM.
2. CONSIDERATION TO APPROVE THE MARCH 11, 1992 BRA MINUTES.
Lowell Schrupp made a motion to approve the March 11, 1992 HRA
minutes, seconded by Everette Ellison and with no additions or
corrections the minutes were approved as written.
3.
CONSIDERATION TO ACKNOWLEDGE HRA RESOLUTION AND MR. SCHERER'S
LETTER, AND TO HEAR PRELIMINARY RECOMMENDATION FOR TIF
DISTRICT FOR POST OFFICE EXPANSION.
The HRA members acknowledged the resolution drafted under BRA
direction and submitted to Dr. Ehlen. Koropchak reported in
a telephone conversation with Carl Larson, Real Estate
Personnel for the Federal Government, he indicated a three and
one-half hour meeting was held between parties; however, the
parties were unable to negotiate a one year lease. The Post
Office has no contract and needs a building this year.
Koropchak informed the members that Mr. Pelstring, BDS Inc.,
and herself toured the current Redevelopment District #2 site
and those sites earmarked by the HRA for potential
redevelopment of cottege homes. It is Mr. Pelstring's
suggestion that the District #2 Plan not be modified to
enlarge the boundaries but to created a new Renovation
District of fifteen years.
4. CONSIDERATION TO HEAR RECOMMENDATION AND DISCUSS PLANS FOR
DEVELOPMENT OF THE COTTEGE HOME HOUSING CONCEPT.
Koropchak reviewed the information outlined in the agenda
supplement regarding Duane Schul tz I s reference of Prest ige
Builders and who developed McCarland Plaza.
Jeff O'Neill showed a video of the northerly Block 54 site,
highlighting the Kruse property destroyed by f ire and now
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HRA MINUTES
4-23~92
demolished. He informed members of his previous conversations
with Mr. Kruse: Ed Kruse wants to rebuild on the property and
the original request for a variance was an error. Therefore,
if the HRA is interested in this si te, they should first
commit to the site, and than look either to stall the Kruse's
or to purchase. Mr. 0' Nei 11 said he thought the Kruse's
asking price was about $30,000 as they are looking for a
replacement lot in the city.
Tom St. Hilaire informed the HRA members that lots in his
neigborhood (Mississippi Drive) which are larger, on the
river, and have water and sewer sold for $22,000. Mr. St.
Hilaire projects if the BRA commits to the redevelopment of
northerly Block 54 that development would not take place for
at least five years. Koropchak reminded BRA members if the
HRA purchases property, the seller may be entitled relocation
costs by law. Total estimated increment of seven cottege
homes ($150,000 EMV each) over 15 years at the maximum is
$80,000 - $100,000.
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The HRA members agreed on the concept and need for upscale
cottege housing, one floor, and close to downtown.
Additionally, they agreed on the need to eliminate substandard
property and the desire not to be landowners. Mr. 0' Nei II
gave the HRA a worst case scenario, if the HRA purchased the
property for $30,000 their greatest loss would be the
difference between the purchase and selling price.
The HRA agreed with Mr. O'Neill's scenario; however, they saw
$20,000 as a fair and equal price and felt it was within
reason to reduce the offer thereafter by $500 per month
commencing in July (example: $19,500). Additionally, the HRA
recognizes they have other optional redevelopment sites.
Tom St. Hilaire made a motion authorizing Jeff O'Neill and
Koropchak to submit a firm HRA purchase offer of $20,000
maximum for the Kruse property. Ben Smith seconded the motion
./ and with no further discussion the motion passed unanimously.
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0'(" ....,~ Due to the increase of property taxes, Chairperson Larson fel t
c~)- ,," a greater need for the HRA to search for a local qual i f ied
~ c.r:.",<.developer\o fouL' 1:l.~o ];>FOjec___ but in no way to substi tute
.... ..0(,.""1: qua 1 i ty .
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5. CONSIDERATION TO REVIEW AND DISCUSS THE J M OIL VARIANCE
REQUEST AS IT RELATES TO RELOCATION OR SOIL CORRECTION COSTS.
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Jeff O'Neill informed the HRA that this concept began when
Bill Aydt (J M Oil) inquired of the potential to build a
storage building at theirPpges~nt Fifth Street site. To meet
City code a principal use variance (office and bath) and hard
surface is needed. Therefore, on Apr i 17th a meet ing was
called to define the problems associated with the operation
and expansion of the bulk tanks on the Burlington Northern
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HRA MINUTES
4-23-92
property located between 5th Street and the railroad tracks,
and to begin to develop a pIan for establishing a long-term
site for bulk tank storage in Monticello. The conclusion was
the need to include Northern Burlington personnel in the
process, to establish a clear definition of the pollution
problem and soil testing costs, and to table the variance
request of J MOil.
A second meeting was held April 16th as a followup to the
previous meeting. Northern Burlington officals were brought
up to date, Jim Moores reported the J M Oil tanks were
registered with the MPCA, Jeff Michaelis reported the
Riverside Oil tanks were not registered until last week and he
thought the former Nelson tanks were not registered, and
O'Neill reviewed the cost estimates to determine extent of
site pollution. The next meeting to be scheduled in a few
weeks would develop a relocation plan, tank owners are to
determine estimated costs for tank relocation within one mile,
and staff is to work wi th the HRA to find sui table and
affordable land in the industrial park or the potential to
trade lands with BN.
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Koropchak noted that unless the substandard Blocks of 9, 10,
and 11 were included in a TIF District the oil tank properties
would not qualify for the establishment of a TIF District.
The creation an Economic District in the industrial park is
possible; however, until building construction concepts are
determined, projected increment can not be estimated. Oil
tanks do not generate increment therefore increment generated
by the project would be minimum.
O'Neill informed the HRA if 5th Street were vacated there is
the potential for multi-residential and commerical development
or for green space. This concept would fit well with Sunny
Fresh's improvements.
Everette Ellison recalled the history of the area and noted
the problems with the Hanson property well when the city's
sewer interceptor was installed.
The HRA took no action. Inorder to avoid any conflict of
interest in the future, Tom St Hilaire went on record by
stating he felt the City should stay clear of broken
properties and should wait until the broken is fixed.
6.
CONSIDERATION TO REVIEW AND DISCUSS THE TANK REMOVAL AND CLEAN
~p REQUEST FOR PROPOSAL BIDS.
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The HRA reviewed the enclosed bids from Germundsen Companies,
Inc. and Schluender Cons~tJ30n, and briefly discussed the
opinions of Service West Construction and Determan Welding &
Tank Service regarding the Gille property.
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HRA MINUTES
4-23--92
In addition, Koropchak updated the HRA of her conversation
with the County Assistant Attorney. He said the MPCA will
only complete an Environmental Report if there is evident of
possible contamination. Secondly, he said the State is the
owner of the property and County holds the property in-trust;
therefore, permission to enter the Gille grounds is granted by
the County Auditor or himself. Lastly, he would investigate
the potential of squatters on the premise.
With the above information provided, Al Larson made a motion
for the HHA to disembark from the Gi lIe property therebye
entrusting full responsibility to the County and State. The
motion was seconded by Tom St. Hilaire and without further
discussion the motion passed unanimously.
7. CONSIDERATION TO ELECT 1992 HRA OFFICERS.
Everette Ellison made a motion to cease floor nominations and
to elect Al Larson, Chairperson and Ben Smith, Vice
Chairperson of the Monticello Housing and Redevelopment
Authori ty. The motion was seconded by Tom St. Hilaire and
without further discussion the motion passed unanimously.
8.
OTHER BUSINESS.
a) The HRA accepted the bi 11 ing from BDS, Inc. for the
period of February 17 through March 15.
b) Aroplax Corporation - Koropchak informed the HRA that the
City has a Letter of Intent executed by Mr. Jerry Schoen.
The Letter of Intent states a 180 day commitment to a
Monticello location and if the company withdraws a
penal ty of $5,000 is due. The funding appl.icat ion
process will be reinstated with applications to a bank,
the State, Central Minnesota Initiative Fund, and the
EDA.
c)
Modern Molding, Inc. - Koropchak informed the BRA of a
Long Lake plastic injection molding and tool & die maker
interested in Monticello. Having toured Monticello and
meeting with IDe representatives and Pat Pelstring, the
company was very impressed wi th Monticello. A si te
location decision is expected around the first of May,
competi tion is between Monticello and Buffalo. The
project includes a top quality 20,000 sq ft facility with
current employment of 21-22 and projected at 26+.
According to Mr. Pelstring the company appears
financially sound. Total project costs are estimated at
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$800,000 with anticipated sources from the bank, State,
CMIF, TIF, and GMEF. Projected TIF is $70,000 to
$80,000.
The company interested in the HRA lot, Koropchak asked
for a selling price. Inorder for a liability to become
an asset through the creation of jobs and taxes, the HRA
responsed $1.00 out-right. TIF was suggested inorder for
the HRA to collect some of its debt. The HRA agreed upon
an asking price of $50,000 for the land wi th si te
improvements not to exceed $20,000. The HRA gave
preliminary concept approval for use of TIF.
d)
Remmele Engineering - The HRA was informed of Remmele's
expansion plans for 10,000 sq ft with the potential of 10
new jobs. Additionally, the HRA was informed of the
possibility for Hemmele to install a sprinkler system
throughout the entire facility. Remmele isn't in favor
of this because water is more damaging to their machinery
than fire. No other Remmele facility has been required
to install sprinklers. Because of Remmele I s grade of
building construction and occupancy, State Building Codes
seem to indicate the need for sprinklers. A meeting is
scheduled for next week between Remmele officials, city
staff, and a State Building Code Monitor to review codes,
outline options, and to determine the best solution.
9. ADJOURNMENT.
The HRA meeting adjourned at 8:45 PM.
2~c~~~ut~tor
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