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EDA Minutes 03-14-2018MINUTES RECIJLAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, March 14th, 2018 — 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: Steve Johnson, Bill Tapper, Jon Morphew, Tracy Hinz, 011ie Koropchak-White, Lloyd Hilgart, and Jim Davidson Staff Present: Jim Thares and Angela Schumann 1. Call to Order Steve Johnson called the meeting of the EDA to order at 6:00 p.m. 2. Roll Call 3. Consideration of additional agenda items BILL TAPPER MOVED TO APPROVE THE CONSENT AGENDA EXCLUDING ITEMS A, B, C, AND F. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED, 7-0. 4. Consent Agenda a. Consideration of approving Regular Meeting Minutes — February 14, 2018 ITEM WAS REMOVED FROM THE CONSENT AGENDA. b. Consideration of approving Special Workshop Meeting Minutes — Februan, 14, 2018 ITEM WAS REMOVED FROM THE CONSENT AGENDA. c. _Consideration of approving payment of bills ITEM REMOVED FROM THE CONSENT AGENDA. d. Consideration of Escrow Agreement between Michael W Froslie and Kathleen A Froslie and City of Monticello EDA Recommendation: Approve Escrow Agreement related to the purchase of 103 Pine Street as presented. e. Consideration of Lease and Property Management Agreement with Michael and Kathleen Froslie Recommendation: Approve Lease and Property Management Agreement related to the purchase of 103 Pine Street as presented. f. Consideration of Northland Securities, Inc. contract for preparation of Affordable Housing TIF District materials and plan Economic Development Authority Minutes — March 14, 2018 Page 1 1 6 ITEM WAS REMOVED FROM CONSENT AGENDA TO ITEM 8.5. 4a. Consideration of approving Regular Meeting Minutes — February 14, 2018 Steve Johnson recommended changes to the regular meeting minutes for the adjournment of the meeting with the motion made by Steve Johnson. BILL TAPPER MOVED TO APPROVE THE REGULAR MEETING MINUTES FROM FEBRUARY 14, 2018. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 7-0. 4b. Consideration of approving Special Workshop Meeting Minutes — February 14,2018 Steve Johnson recommended changes to the adjournment of the meeting with the motion made by Bill Tapper. BILL TAPPER MOVED TO APPROVE THE SPECIAL WORKSHOP MEETING MINUTES FROM FEBRUARY 14, 2018. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 7-0. 4c. Consideration of approving payment of bills Jon Morphew asked why there were two separate charges for two of the same addresses from Kennedy and Graven. Jim Thares explained that it was an additional amount that was charged. TRACY HINZ MOVED TO APPROVE THE PAYMENT OF BILLS THROUGH FEBRUARY, 2018. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 7-0. Regular Agenda 5. Consideration of Purchase Agreement for 112 West River Street Jim Thares explained that the property is located in a redevelopment area. The parcel is just above 5,000 square feet, with a building of 3,432 square feet. The County Market Value is listed as $93,000 for 2018. In 2006, the seller purchased the property under contract for deed for $250,000. The EDA authorized to make a purchase for the property at $370,000 with global settlement including all relocation benefits. The current owner is Union Speed and Style and would be allowed to remain in the building for one year with no rent charge. Lloyd Hilgart recalled from a previous meeting that the current owners would be moved by the end of the year. Thares indicated that they pressed to stay until March, 2019. Thares stated that the direction by the EDA was to negotiate with the owner to state that if a developer was interested in the land that Union Speed and Style would vacate the premises. Thares stated it would be unlikely that a developer would be ready for construction by March, 2019. Thares also indicated that all maintenance, utility bills, and Economic Development Authority Minutes — March 14, 2018 Page 2 16 all other charges for occupying the building would be the responsibility of Union Speed and Style until March, 2019. It was indicated that any unexpected charge under $10,000 (to be changed from $1,000 in the agreement) would be the responsibility of Union Speed and Style. Thares also added that they would pay property taxes until they vacated the building and any residual costs after their departure would be consumed by the EDA. Thares would verify. Angela Schumann stated that the EDA wanted it to be clear that in the purchase and lease agreement that the seller is responsible for all property management responsibilities, however the EDA would not be making any additional repairs or maintenance to the building. The seller could leave at any time and turn the building over to the EDA prior to March, 2019. Steve Johnson asked if there are any assessments against the building. Thares indicated he would check on that. BILL TAPPER MOVED TO APPROVE RESOLUTION 2018-05 AUTHORIZING THE PURCHASE OF THE COMMERCIAL PROPERTY LOCATED AT 112 WEST RIVER STREET WITH REVISIONS AS NOTED ABOVE. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 6-0-1 WITH STEVE JOHNSON ABSTAINING. 6. Consideration of Downtown Business Improvement Program Group Meeting Findings Jim Thares indicated per direction at a previous EDA Meeting, staff was authorized to meet with downtown property and business owners to talk about potential loan and grant programs for fagade improvements, renovations and remodels, and energy efficiency. Meetings were held on February 12th and 26th and were well attended. A summary of the feedback was provided in the staff report. Thares hoped that during the April EDA meeting a proposal of loan or grant program would be further considered. Steve Johnson asked about the format of the program. Thares stated that staff would utilize Central Minnesota Housing Partnership's process and forms to administer the program. Thares explained the EDA would need to identify a funding source and approve the terms of the program. Additional discussion ensued. Thares indicated at the next EDA meeting, potential funding sources would need to be discussed. 7. Consideration of Downtown Building Facade Design Template Proposal Angela Schumann explained that the Cuningham Group has prepared a proposal in response to potential loan program offerings for areas such as fagade improvements. Schumann indicated that the Cuningham Group watched the January EDA meeting in developing a proposal to match the EDA's discussion. Schumann understood from previous discussions that the EDA would like to provide examples of improvements that are consistent to the Small Area Study. Schumann reviewed the Cuningham proposal. She noted that the cost of the services for a Economic Development Authority Minutes — March 14, 2018 Page 3 16 visual companion to the Small Area Study would be $4,000. Steve Johnson asked if there would be multiple design concepts developed. Schumann indicated that they would provide a block template instead of individual design guidelines for buildings in the scope area. Schumann also stated that the City recently hired a Creative Art's Consultant that could also provide ideas to individual property owners. Bill Tapper requested that Cuningham be asked to provide design layouts to individual building property owners on an as requested basis. Schumann indicated that she would check with Cuningham Group to provide an itemized proposal to work with individual property owners as requested. Discussion continued regarding how prescriptive a building and fagade improvement program should be for loans or grants. Schumann explained that the City also received a proposal for a walkability improvement program. Schumann stated that more information would be provided at the next EDA meeting. BILL TAPPER MOVED TO APPROVE THE PROPOSAL BY CUNINGHAM GROUP FOR DESIGN GUIDELINES FOR DOWNTOWN FACADE IMPROVEMENT PROGRAM. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 7-0. 8. Consideration of Concent Review of Multi -family "Affordable Housing TIF" Proposal Jim Thares explained that Briggs Properties would provide a presentation for a multi- family development proposal at the Master's Fifth Avenue site. He indicated that the development site concept was recently reviewed by the Planning Commission and City Council for preliminary comments. Patrick Briggs, Briggs Properties introduced himself and provided an overview of the project. A written narrative was provided explaining the general design concept and the amenities. Briggs indicated that the property currently is under a redevelopment TIF district, but that there is a restriction on utilizing increment dollars for the project due to the amount of time the land has been undeveloped. Briggs indicated that building materials and construction costs are increasing and he would not be able to proceed with the project without TIF assistance. Ideally, he would like to start building by July or August. Lloyd Hilgart asked for clarity on the redevelopment district. Discussion pursued. Angela Schumann explained that there is a five year rule that effects how a TIF district can be modified including the budget and the amount of TIF the developer is eligible for. The five year window was extended to ten years, however the ten years has since past. The buildings were demolished to begin that ten year window. The only funds the developer could seek is 25 percent of anything in excess of $170,000. Economic Development Authority Minutes —March 14, 2018 Page 4 16 Briggs explained that with a new TIF affordable housing district, it allows a new slate to start. Briggs stated the project would not be feasible under the current TIF district. Jim Davidson asked if a new TIF district offers a new TIF value. Briggs confirmed stating that it's based on the value of the project itself. Steve Johnson clarified that the current redevelopment TIF district would be decertified and an affordable housing district would be replaced. Briggs confirmed and stated a bank would not finance the project under the current TIF district. Tracy Hinz asked if there would it be enough time to set up the district by the July/August construction schedule. Thares confirmed that is generally possible. Additional discussion ensued regarding income restrictions for a set amount of units in the facility. JIM DAVIDSON MOVED TO CALL FOR SPECIAL MEETING TO REVIEW FINANCIALS AND PROCESS FOR PROPOSED TIF PROJECT. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 7-0. Thares clarified the date and time of the Special Workshop meeting as being Wednesday, March 28th at 4:30 p.m. 8.5 Consideration of Northland Securities, Inc. contract for preparation of Affordable Housing TIF District materials and elan Steve Johnson indicated that this item would allow work to begin that is pertinent to the information that needs to be discussed at the Wednesday, March 28th at 4:30 p.m. meeting. Thares confirmed. TRACY HINZ MOVED TO APPROVE NORTHLAND SECURITIES FINANCIAL PLANNING AGREEMENT FOR SERVICES RELATED TO THE CREATION OF AN AFFORDABLE HOUSING TIF DISTRICT AS PRESENTED. OLLIE KOROPCHAK- WHITE SECONDED THE MOTION. MOTION CARRIED, 7-0. 9. Director's Report Jim Thares provided an overview of the Director's Report. Thares provided the EDA general fund balance, but noted that there are additional dollars that can be spent from TIF districts on the acquisition of property. Steve Johnson also explained that the tax levy dollars would be added by the end of June. Thares confirmed. Thares added that Phase I — Environmental review documents were completed by Braun Intertec for 103 Pine Street. No recognized environmental conditions exist on the property. Thares reviewed the prospect list with the EDA. Economic Development Authority Minutes — March 14, 2018 Page 5 1 6 10. Adiourn OLLIE KOROPCHAK-WHITE MOVED TO ADJOURN THE MEETING AT 7:42 P.M. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED, 7-0. Recorder: Jacob Thunander Vj— Approved: April 11, 2018 Attest: 'aTs, Economic Development Director Economic Development Authority Minutes — March 14, 2018 Page 6 16