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HRA Minutes 08-05-1992 . . . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, August 5, 1992 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Smi th, Everette Ellison, and Tom St. Hilaire (tardy). MEMBER ABSENT: Lowell Schrupp. STAFF PRESENT: Jeff O'Neill, Koropchak. Gary Anderson, and Ollie 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 JULY 6, 1992 HRA MINUTES. Ben Smi th made a motion to approve the July 6, 1992 HRA minutes, seconded by Everette Ellison, and with no additions or corrections the minutes were approved as written. 3. PUBLIC HEARING ON THE ACQUISITION FOR FUTURE DISPOSITION AND REDEVELOPMENT OF LANDS RELATING TO OUTLOT A, COUNTRY CLUB MANOR, AND ADOPTION OF RESOLUTION THEREOF. Chairperson Larson opened the public hearing on the acquisition for future disposition and redevelopment of lands relating to Outlot A, County Club Manor. The said public hearing necessary for compliance with the Minnesota Statutory, HRA Early Acquisition. Koropchak informed the public that the HRA's only interest in this property is to accommodate the Ci ty Council's request for use of the HRA' s name. The property is being acquired through tax forfeiture and the City has been granted the right to construct an earthen berm on the property per the Memorandum of Understanding between the HRA and Wright County. The following public comments and concerns were raised by Willard and Barb Jensen, 32 Fairway Drive; Jack Nelson, 8 Center Circle; and William G. Schmidt, 27 F'airway Drive, Monticello. The public's preference was for a single residential development; however, Mr. O'Neill responsed that the property is zoned R-3 (Medium Density Residential) which is for multi-family (apartments) dwellings and not homes. The City's R-3 land-controls include the density, parking, tree . . . plantings and landscaping, off-street parking, and number of floors (limi t two-story), but does not control the income level of dwellers. The public was informed that, currently, no active development proposal is before the City or the HRA. Secondly, the public was concerned about the garbage and potential contamination associated wi th the berm construction. Mr. O'Neill responsed that soil testing was completed by the Ci ty and the material was of clean-f ill and not hazardous waste. The six foot berm will serve as a freeway buffer with completion this fall through shaping, additional black dirt, and seeding; thereafter, will the HRA be responsible for property maintanence (mowing). Next, the public voiced their concern of the potential over- use of the neighborhood park if the property were developed into multi-housing. Mr. O'Neill agreed that area's present ,_~publiC park plan was not good and informed the public that ~ '" ..pT'Pp~T'P$ another park could be incorporated into a future development or an area storm drainage development proposal. Lastly, the public expressed they were not opposed to the acquisition of the property; however, because of privately invested dollars into the neigborhood they supported a development which was pleasing to the neighborhood and opposed any development which might create a potential big eye sore. The said publ ic hear ing comments wi 11 be submi tted to the Public Works Director and City Council. Chairperson Larson thanked the concerned citizens and with no further comments or questions, closed the public hearing. With no public opposition for acquisition of the property, Ben Smi th made a motion to adopt the resolution authorizing acquisition of Outlot A, Country Club Manor, which lies within Redevelopment Project No.1 of the Modified Central Monticello Redevelopment Plan. The resolution further states that the said acquisition was through the Memorandum of Understanding and was necessary to relieve hardship, and that the HRA assumes the responsibility of the costs related to the acquisition. The motion was seconded by Al Larson and with no further discussion the motion passed unanimously. The action was necessitated by the Memorandum of Understanding and for compliance of Minnesota Statutory 469.027. A second motion was made by Al Larson requesting the City prepare an Indemnity Agreement for execution between the City and the HRA. The agreement to release the HRA of any rights . . . HRA MINUTES AUGUST 5, 1992 4. of revenues and of any obligations of expenses or maintanence associated with the acquisition of the said property. Everette Ellison seconded the motion and without further discussion the motion passed unanimously. The agreement intended as a recorded accountable follow-through of the City's request to use the HRA's name (only) for convenience, with no obligation of associated costs. Suggestion made by Pat Pelstring. PUBLIC HEARING ON THE ACQUISITION AND DISPOSITION OF LANDS RELATING TO TIF DISTRICT NO. 1-14 AND ADOPTION OF RESOLUTION THEREOF. Chairperson Larson opened the pub~ic hearing on the acquisition and disposition of lands relating to TIF District No. 1-14 which lie within Redevelopment Project No. 1 of the Modified Central Monticello Redevelopment Plan. Having satisfied statutory requirements, the district is being established for the Suburban Machine & Manufacturing development. The development project is for the construction of an 11,000 sq ft office/manufacturing facility located on a 3.95 acre parcel to the east of the Remmele Addition and north of Chelsea Road. The total TIF assistance of $50,000 is for the land write-down ($29,625) and site improvements. Koropchak pointed-out that in the future a public hearing for the acquisition or disposition of lands will not be necessary as the Redevelopment Contracts no longer deed the property to the HRA via a quick-claim deed. This reduces the HRA I S recording fees and more, importantly, eliminates the HRA from any potential environmental liabili ties. Therefore, this resolution authorizes to assist with the acquisition costs. With no public comments, questions, or opposition, Chairperson Larson closed the public hearing. Everette Ellison made a motion to adopt the resolution authorizing to assist with the acquisition costs of the described raw lands to Bradley D. and Mary A. Barger. The motion was seconded by Ben Smith and with no further discussion the motion passed unanimously. The motion affirms the previous negotiated land cost assistance. 5. CONSIDERATION TO REVIEW AND ACCEPT THE FINAL DRAFT OF THE PRIVATE REDEVELOPMENT CONTRACT BETWEEN JERALD J. AND MARY E. SCHOEN AND THE HRA. The agenda supplement provided the HRA with highlights of the Private Redevelopment Contract between the Schoens and the HRA. This the final draft, Koropchak said, "Although the total project costs are high, she felt good about recovering Page 3 . . . HRA MINUTES AUGUST 5, 1992 a portion of the HACA lose and the final agreement of a 30% building construction completion by the 31rd of December, 1992." The tax increment assistance of $85,000 to be disbursed at the time the building is 30% complete and other listed conditions satisfied. The land write-down is a grant of $70,000 and the remaining $15,000 is a loan at an 8% interest rate over seven years. The annual tax increment guarantee and the letter of credit are both for an amount of $21,500. Al Larson made a motion to accept the negotiated terms and conditions of the final draft of the Private Redevelopment Contract between the HRA and Jerald J. and Mary E. Schoen as prepared by Holmes & Graven. The motion was seconded by Ben Smith and with no further discussion the motion passed unanimously. 6. CONSIDERATION TO REVIEW AND ACCEPT THE PRELIMINARY DRAFT OF THE PRIVATE REDEVELOPMENT CONTRACT BETWEEN BRADLEY D. AND MARY A. BARGER AND THE HRA. Again, the agenda supplement had highlighted the terms and conditions of the Private Redevelopment Contract between the HRA and the Bargers. The tax increment assistance is for a total of $50,000, land write-down of $29,625 and site improvements not to exceed $20,375. Land write-down disbursed at the time the building is 30% complete and site improvement payment upon certification of evidence. The preliminary draft asked for an annual tax increment guarantee and letter of credit both in the amount of $12,565. Tom Racette, Barger's attorney, feels its unreasonable to request a letter of credit for such a small project, as well as, an additional expense. At this point, the only unresolved issue of the contract is the need for the letter of credit. Plans are for the contract to be negotiated and executed prior to the Ci ty Council's adoption of the TIF District No. 1-14 and its Plan on August 10. Koropchak pointed-out without the letter of credit, the HRA has no funds to draw upon in case of default; however, the HRA is guaranteed an annual tax increment of $12,565 for the life of the district which is sufficient to retire the $75,000 HRA loan from the City. Everette Ellison made a motion to accept the negotiated terms and conditions of the preliminary draft of the Private Redevelopment Contract between the HRA and Bradley D. and Mary A. Barger as prepared by Holmes & Graven or to accept the elimination of the letter of credit inorder to commence the Page 4 . . . HRA MINUTES AUGUST 5, 1992 timely project. The motion was seconded by Ben Smith and with no further discussion the motion passed unanimously. The project awaits final Central Minnesota Initiative Fund and plat approvals. Mr. St. Hilaire arrived at the HRA meeting. 7. CONSIDERATION TO REVIEW THE KNOCK-DOWN RULE RELATING TO TIF DISTRICT NO. 1-7. The HRA reviewed the Knock-Down Rule as it applied to TIF District No. 1-7 for The H-Window Company. The members had no opposi tion to the response letter submitted to the County Auditor. 8. CONSIDERATION TO ACCEPT THE JULY 25, 1992 BDS, INC. BILtING. The HRA reviwed and accepted the July 25, 1992 BDS, Inc. billing. 9. OTHER BUSINESS. Gary Anderson, City Building Official, informed the HRA members that the City has filed a public nuisance notice against the Gille property to remove vehicles, junk, and other above-ground blighted materials within fifteen days. The city is working wi th the county and has asked Commissioner Pat Sawatske for assistance to expedite the matter. If Gille does not respond to the notice, it is the intent of the City to contract with Ruff's Auto for the labor-intense cleanup portion and to assess/levy the above-ground cleanup costs against the property. The City Mayor would like to see the property cleaned-up; however, prior to removal of materials city authorization must be obtained. A meeting has been set for August 13 between city officials and the County Assistant Attorney to determine governmental roles and liabilities. The Building Official further reported that the city has obtained two cost estimates for borings and laboratory tests and a preliminary observation determined that four underground tanks exist on the property's highway side. Also, it was reported that 80% of the costs could be recovered by the City through the PCA. Mr. Anderson requested a HRA recommendation for the Mayor and City Council. After a brief discussion, the members concluded that the Gille property, today, has a negative value. Their recommendation was to encourage and support the enforcement of Ci ty' s Nuisance Ordinance for above-ground cleanup of the Gille property, to obtain the City's Attorney to represent the Page 5 . . . HRA MINUTES AUGUST 5, 1992 city regarding the Gille property tax forfeiture, and not to proceed with city borings and laboratory tests until after a redeveloper is found. Mr. 0' Neill briefed the BRA on the upcoming Farm Credi t Auction to be held September 15, 1992, 5;00 PM, at the VFW Club. The preliminary site plan highlights the storm sewer drainage routes and ponds which serve the Chelsea area. Preliminary plans indicate the need for a 10 acre parcel to serve as the overall drainage pond (to the east of Cty Rd 118 and south of I-94). Long range plans would connect the pond to the Mississippi River via drainage under the freeway. The property will be platted after the auction to allow greater flexibility to Farm Credit and potential buyers. 10. ADJOURNMENT. The BRA meeting adjourned at 8:35 PM. CJ~ ~d1~J--- Ollie Koropchak, HRA Executive Director Page 6