HRA Minutes 12-02-1992
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, December 2, 1992 - 7:00 p.m.
City Hall
MEMBEHS PHESENT:
C:ha.irperSOTl AI L&l'son,
Smith, Lowell Schrupp,
Tom St. Hila.tre.
V. C1.'
Ice _'llctlr'person
Everette Ellison,
Den
and
STAFF PRESENT:
Ollte Koropchak.
STAFF ABSENT:
Rick Wolfsteller and Jeff O'Neill.
GUEST:
Pat Pelstring, BDS, Inc.
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 1.03
p.m.
2. QONS):DJ~RAj:'ION_I~_.~.PPROVE THE WJVE~:Q.I~R~.1..l 1992 }Lf'0~JlIHl!'TF.~~:_
Lowell Schrupp made a motion to approve the November 4, 1992
liRA minutes, seconded by Ben Smith, and with no corrections or
additions the minutes were approved as written.
3.
CONSIDE1'\ATION TO I\EVIEt-J CUSTOM CANOPY'S CONCEPT PLANS FOR
_~~'M_~~~~..~~___~~'_',_~~~~_'~~'~==~~.'~~~'M~'~~~
POTENTIAL TIF ASSISTANCE.
KOl'Opchdk rei terated the Custom Canopy project and plan~" as
outlined in the agenda. Of the projected $8,661.60 annual
incl'em.?nt, Mr. Pelstring estimates an annual tax: increment
penalty of $1,970 and an annual net increment of $6,690 aver
eight years beginning in 1995 through 2002. This sufficient
to COVE~r a uond issuance of $45,000 and a net procF'ed of
$30,000.
The BRA found the Custom Canopy project to be in~compliance
wi th the TIF Policy for est;3.bJi:3hment of an Econon~ic DL,tl'ict.
Because of the smaller pro j ect size and the com:pany I s
development hassles with the City of Albertville, Mr.
Pelstring suggested the HRA offer-' a pay-as--you~go annur;l
assistance of $5,000 to Custom Canopy. This comparative to
the Russ Martie TIF assistance.
Tom st. Hilaire made a motion authorizing Pat 1'81st1'ing to
establish TIP District No. 1-15 for Custom Canopy subject t()
project plan c:omp1 iance wi th the Ci ty' s zon1.ng and ol'dinance,
company aCCefJtance of the annual $5, 000 pay~as~yuu.--9c; TIB'
assistance, ;illd ,j.p;JI1 execution and delivcory of the 'rIB' Lette;:'
of intent. The motio:cl v-ias se(;ond(~d by Den Sml th and .;,..jJthout
further dtscussion the motion passed unanimously.
HRA MINUTES
. DECEMBER 2, 1992
4 . CON SID E:RA T I 0 N_,!, 0 R~:Y-"I-~YL.;sD S, IN C. In 1.1. I N G S AN.!Lg.91~'U~.~t(~~~,_
UpOD the BRA request, Mr. Pelstring explained the following
rational for the BDS billings in question. First, the City
was charged approx.imately $1,677.75 for pre:para:i.on of the
CMIF (Aropla.x) application, althollgh, not approved by the
Board becaU[~e our agreement for packag.i.ng is based on a
straight-line billing. Secondly, Mr. Pelstring apologized for
the error in billing for the two-hour Aroplax Reception which
is considered marketing, therefore, not billable.
Thirdly, the $2,500 Twin City Metro fee is inpart the 1.5%
SBA-OMNI Board fee and not a duplication of BDS charges.
NE!xt, thf~ Business Plan ($1,045) is a part of the Economic
Recovery Grant application and should not be considered
separately. Although, the HRA felt a Business Plan is the
responsibility of the company, Mr. Pelstring reminded the BRA
of the approved grant payback. The liRA also questioned the
seriousness of the Aroplax consideration for a Brooklyn Park
site loc8"tion.
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Mr. Pelstring explained the BDS marketing concept as
specialization with a team basis, therefore, as the Aroplax
project involved numerous funding sources, various BDS
individuals were involved. Lastly, the BRA was informed that
once the funding application is approved, BDS is no long~r
involved.
The HRA reminded Mr. Pelstring that the questions were asked
for clarification and not to be taken as production dis---
satisfaction. The HRA agreement with BDS hired Mr. Pelstring
for TIF and financial packaging.
5.
CON~;IDERATION TO REVIEW _TI1"~URPLUS .~.:LUN~S"
POTENTIAL USE OF FU~S:-
AND DISCUS~;
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Koropchak explainE~d the economic development reVeni..H:: sununal-'y
provided with th(~ agen(1a, stating the TIF "Surplus" was taken
from Mr. Felstring's accountability of a year ago; the GMEF is
based on approved loan paybacks with the assumption of
collected balloon payments; anticipated UDACi payback; and
first $100,000 principal and interest payback of the $170,000
State Economic Recovery Grant. Also, a detailed summary of
the GMEF loans with annual payback and loan terms was
submitted to the HRA. All loan paybacks are current.
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ERA MINUTES
DECEMBER 2, 1992
Altbough, the TIE' "Surplus" can legally be used feiY.' pub.l.ic
improvements, business relocations, or soil restoration which
benefit or support the objectives of the HRA, the HRA denied
use of the surplus dollars for those purposes. The HRA felt
the current estimated surplus of $127,975 (a conscr'vat:i.ve
estimate by Mr. Pelstring) was not excessive. The HRA felt
the besit use for the sUl'plus was to reduce bond debt.
However, since the BRA does not exercise their right to levy,
the final consensUr> fOl' the use of the TIF "Surplu:.-,:;" \va:;,; t'::-J
provide addi tional assistance to quali ty companies ;-.uch a:.;,
Remmele Engineer'ing 01" to provide ass.ist<'lnce for <:; sen.i.oot'
housing project.
6.
CONSIDERATION TO AUTHORIZE THE TRANSFER OF 10% OF THE _1992 TIF
PRUJECT INCOME INTO A HF~A DEVELOPHENT FUHQ....__T.Q.__._i:l1:.F'S_E't.
PEVELOPMENT EXPENSES.
First, the BRA reviewed their action of a year ago regarding
the denial to au tho!' ize a 10% <3.clminis tr;~ t i ve expendi ture
];JOLicy. Secondly, the ERA heard an explanation for' the year-'
end request by staff for HRA authorization to transfer 10% of
the 1992 total TIF project incomf.~ or- $:34,000 from TIE' 2lCCountE;
in to a deve}.)pmen t fund (HRA d.ccoun t) inortier to cover or
recov~r all developmeDt costs associated with the Aroplux and
;5MM projects.
W.ithout an accountability of the assocJcci.ted devc-'loflll"lE:mt co:::;t::;,
the BRA viewed the 10% transfer to be a potential abuse of the
TIF purpose, whereas, the BRA would prefer the project income
be returned to the taxing j1lrisdictions. Mr. Pelstl'ing
explained that the 10% transfer authorization did not mean the
HRA reI inquL;;hed their TIF contrel. In response to the HRA' s
question, Mr. Pelstring said the Monticello HHA was less
willing and creative to use TIF dollars than other communities
which is not necessarily bad.
Tom St. Hilaire made a motion requesting an accountability of
all development COGts associated wi th the Aroplax and SMM
projects by invoice prior to execution of a HRA resolution of
autl:lOr.ization to tl'ansfer'. The motion was seconded by A.l
Larson and without further discussion the motion passed
unanimously. The accountability mearlt to be similiar to the
pay.-as'-you-'go proce,:;s.
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HRA HINUTES
. DECEMBER 2, 1992
7. CONSIDERATION TO REVIEW THE LETTER OF INTENT BETWEEN THE BRA
AND SI-IINGOflEE, INC. J:;'OF~ POTENTIAL EXTENSION (CONSTRUCJ;:J..91L A~!L.
TIF PREPLAN).
Based on the IDC I S recommendation fOl' the HHA to renew the
Letter of Intent with Shingobee, Inc. on the Construction/TIF
Preplan, Lowell Schrupp made a motion for the liRA to extend
the LetbO)r of Intent for one year wi th the wi 11 ingness of
ShingobeB and the Oakwood Partnership. The motion was
seconded by Everette Ellison and without further discussion
the motion passed unanimously.
8.
CONSIlJ)~RATION TO "AQQPT A HESOLUTION APPROVING A TAX INCREMENT
~~~REEMENT_J?....EJ:}':n~EN--1~-L~._CITY OF MONTICELLC AND THE HEA RELATING
TO _1;'IF DISTHICT NO. 1--12.
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The BRA is asked to adopt a resolution pledging TIF District
No. 1--12 increments from the Aroplax project to the city for
retirement of the $120,000 bond debt. The City Council
authorized issuance of the G.O. Taxable Tax Increment Bond on
November 23. Unlike previous years, the city will not sell
the bond to the public but will purchase the bond as an
investment with a 6.5% interest rate.
LovJell Sc:hrupp made a motion to adopt the HRA resolut:ion
approving a Tax Increment Agreement between the Ci ty of
Monticello and the Housing and Redevelopment Authority
relating to TIF District No. 1-12, The motion was seconded by
Everette Ellison and without further discussion the motion
passed unanimously.
9.
CON.~l!Jl~~-,-l1TION TO ADOPT A RESOLUTION APPROVING A T~_;K~_l~~pmMEN'l'
~CiHEEMENT BETWE;~N THE CITY OF MONTICELLO AND THE BRA REI~TING
TO _ TIP DIST.f<ICT NO. 1"~14.
The BRA is asked to adopt a resolution pledging TIF District
No. 1-14 increments from the Suburban Machine and
Manufacturing project to the ci ty for retirement of the
$75,000 bond debt. The City Council will be requested to
authorize the issuance of the G.O. Taxable Tax Increment Bond
on December 14. Again, the city's intent is to purchase the
bond as an investment at an anticipated 6.5% interest rate.
Lowell SChl"UPP made a motion to adopt the HHA resolution
apl;ll'ov.ing a Tax Increment Agreement between the Ci ty of
Monticello and the Housing and Redevelopment Authority
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HRA MINUTES
DECEMBER 2, .1992
relating to TIF District No. 1-14. The motion was seconded by
Everette Ellison and without further discussion the motion
passed unanimously.
10. CONSIDERATION TO REVIEW AND ;;XECUTE THE lNDEMNITY ACmEEMENT
AND THE TAX--FORFEITED LANDS CONVEYANCE FORM FOR OUTLQT A,_
COU~TRY CLU~_.M~.JIOP~~_
The HRA reviewed the prepared Indemnity Agreement releasing
the BRA of any obligations or revenues for raw lands described
as Outlot A, Country Club Manor. The agreement is a followup
of the Ci ty COllnci I' s action to acquire said property and
request for use of the HRA's name only.
Lowell Schrupp made a motion authorizing the execution of the
Indemnity Agreement between the City of Monticello and the BRA
for raw lands described as Outlot A, Country Club Manor. The
motion was seconded by Tom St. Hilaire and without further
discussion the motion passed unanimously. Said agreement to
be fowarded for execution by the City Mayor and Administrator.
11. c(~Ii~l12..EEATIO~~.~~E AN__.UPDATE AND HEMINDJ:q~ OF THE PLANNl~D_~LK
ELVER SENIOR HOUSING TOUR ON DECEt1BEIZ 9.!. 1992.
BRA members were informed that the Guardian Angel Senior
Housing Campus is owned and operated by an Elk R-i vel' non--
prof i t church orga.niza t ion. Vol un teer ism, campus concept, and
efficient utilization of services are keys to its success.
Members were reminded to meet at the City Hall at 6:30 p.m.
next Wednesday for departure to tour the Elk River facilities.
t1ayor Maus and Hospi tal Administrator Schwientek wi J 1
accompany the BRA. Beca.use of Mr. St. Hi lairs's work schedule
he may meet us in Elk River.
12. gTlIEF~ BU~;rNESlL_:._
a) Potential consolidation of the liRA and the EDA - Based on
Mayor Maus' interest, timeliness with annual commission
appointments, concern for a lack of commission meeting quorum,
and for the potential to increase the efficiency of legal
communica t .ions and fees associated w.i th f "inancial-'a:o::;~>i~;ted
development pr()jects~ Chairperson Larson asked for input from
the liRA and Mr. PelBtring as to the interest or viability of
consolidating the HRA and the EDA.
Mr. Pelstring summarized that some years CigO the right to
establish a BRA was created as an alternative to Port
Author i ty. Due to some tneff.ic iencies and to assure a c lO[~E~:r'
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HRA MINUTES
. DF.CEMBF.H. 2, 1992
tie behJeen a commission and ci ty counci 1 the Light to
estab11::;11 EDA was creatl~d iind hi,s become the more popular
choice. The key role of most BRA today is housing development
tor the low to moderate income, this being done by County
HRA's which administer Section~8 programs, FmHA loans, etc.
A rtRA hi,::; the power to levy indep(~ndent of a ci ty where an EDA
does not have the power to levy .independent 1 y. An EDA
genf~ral1y utilL;:t:!s more creative pow('~rs. It was the HHA1s
opinion that the Monticello BRA exercised marc powers than the
Mt)nticello ElJA.
The BRA discussed the importance of more need for diversity
and asked of the the BRA's liability. The BRA saw the need to
research the subject further and the need to continue talks
with the Mayor.
b) Annual HRA appointment - Mr. Everette Ellison agreed to
another HRA five-year term with an expiration term-date of
December 1997. The BRA recommendf; Mr. F.ll lson' s name to t:tlf::~
t1ayol' and City COllllC i 1 for a.nnual commiss ion appointment. Mr.
Schrupp will be out-at-town January, February, and March; and
Mr. EllisOll will be out-of-town February and possibly March.
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c) Prospect - Koropchak informed the HRA of the industrial
prospect, Wilson Tool International. The company exists in
White Bear Lake, employs 350 people, and arB looking to expand
in Minnesota or Wisconsin. Potential of 20,000 to 40,000 sq
ft huilding, 40 employees within three years, average wage is
$12.00. The company manufacturers punch and tie replacement
parts. Referred to by Remmele Engineering and Maureen
SteimvalJ.. The HHA was supportive of the project.
13.
ADJUURNMENT.
The BRA meeting adjourned at 9;00 p.m.
C)~ \<~~~
Ollie Koropchak, BRA Executive Director
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