HRA Minutes 01-06-1993
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, January 6, 1993 - 1:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Ben Smith, and Tom St.
Hilaire.
MEMBE:RS ABSENT:
Lowell Schrupp and Everette Ellison.
STAFF PRESENT:
Jeff O'Neill and Ollie Koropchak.
STAFF ABSENT:
Rick Wolfsteller.
GUEST PRESENT:
Mayor Ken Maus, Hospital Administrator Barb
Schwientek, and Pat McCullough, co-owner of
Health Planning Management Resources, Inc.
1. CALL TO ORDER.
Chairperson Al Larson called the HRA meeting to order at 7:00
p.m.
2 .
GUEST PRESENTATION: PAT MCCULLOUGH, THE MARKET STUDY AND
OTHER OPTIONS NECESSARY FOR ASSISTED-LIVING SENIOR HOUSING.
Pat McCullough outlined for HRA members what is normally
considered in a Market Feasibility Analysis. The study which
is used to assess the demands for congregate or assisted
living housing consists of two phases. Phase I defines the
primary and secondary market areas through data collected
wi thin a retail and heal th care service area. Inventory
assessments include existing and projected population as well
as living arrangements and income levels, competitive projects
such as nursing homes and other subsidized housing projects,
community-based or support services available, and the
potential draw from outlying areas. Federal/local housing
programs and service options, and types of ownership/fee
structures are also defined. Additionally, Phase I includes
interviews with seniors/senior organizations as to the
attitudes and habits of the area seniors. Along with the do's
and do not's of a proposed si te, the market study would
identify the potential feasibility of a proposed project by
number of uni ts or project size and a fee structure which
could be supported.
If Phase I identified a need and a decision was made to
proceed, Phase II known as the consumer research would survey
persons potentially eligible for the proposed project and/or
would consists of a series of focus groups.
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HRA MINUTES
JANUARY 6, 1993
In today's world, health care services are generally utilized
by seniors 75 years or above and trends indicate today' s
senior appears to be more affluent. Minnesota has seen an
increase of immigration in the over 75 age population.
Subsidized project rates are generally 30% of one's income and
projects depend upon funding availability.
Pat said she has done a reasonable amount of work for the
Monticello-Big Lake Hospital District and has worked wi th
Carol Mills. Phase I would be completed in 6-8 weeks at a
cost of $5,600 and Phase II in about a week at a cost not-to-
exceed $3,500 for a maximum total of $9,100. Today, very few
senior housing projects are developed privately because they
are not profitable. The best time to open a senior project is
in the spring, and seniors can be economically good for a
community and need options.
Barb Schwientek expressed the Hospital District's interest in
the management (rental and providing services) of a senior
housing project. The Hospital District and the HRA are not
interested in development or ownership.
HRA recommendations were for Pat McCullough to provide a list
of interested developers (some turn-key), for Schwientek and
Koropchak to develop a newspaper article or advertisement for
local developer/ownership interest atter Schwientek has
reviewed the concept with the Hospital Board, and to contact
Brad Larson as a courtesy measure. The HRA reiterated their
interest to serve as a facilitator and to investigate the need
for senior housing.
Chairperson Larson thanked Ken, Barb, and Pat for their
attendance and participation.
3. CONSIDERATION TO APPROVE THE DECEMBER 2, 1992 HRA MINUTES.
Member St. Hilaire asked for a clarification to the motion
under item six, page three. Thereat ter , Ben Smi th made a
motion to approve the December 2, 1992 HRA minutes, seconded
by Tom St, Hilaire, and with no corrections or additions the
minutes were approved as written.
4.
CONSIDERATION TO REVIEW FOR ACCOUNTABILITY ALL DEVELOPMENT
COSTS ASSOCIATED WITH THE AROPLAX AND SMM PROJECTS AND
AUTHORIZATION TO TRANSFER FUNDS.
Enclosed with the agenda was a copy of the accounting ledgers
for the SMM and Aroplax TIF Districts as prepared by Mr.
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HRA MINUTES
JANUARY 6, 1993
Wolfsteller, and a summary of the 1992 HRA Budget and project
costs as prepared by Koropchak. Koropchak indicated copies of
individual billings were available for HRA review.
First, Koropchak reviewed the statutory definition of
administration expenses to include services provided by bond
counsel, fiscal consultants, and planning or economic
development consultants; and the limitation of administrative
expenses as not-to-exceed 10% of the total projected tax
increment.
Koropchak informed the HRA that the projected 10% tax
increment for the SMM project is approximately $10,000. Total
project expenditures were $14,175. The breakdown is TIF
Packaging, $6,000; Other Finance Packaging, $3,200; Other
Project Costs, $3,500; Engineering Costs, $1,300; and
Miscellaneous Costs, $180.
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The projected 10% tax increment for the Aroplax project is
approximately $15,800. Total project expenditures were
$24,800. The breakdown is TIF Packaging, $9,800; Other
Finance Packaging, $12,300; Other Project Costs, $1,800, and
Engineering Costs, $840.
Koropchak indicated administrative expenses referred to costs
associated with development of a TIF district. Therefore,
staff is requesting the HRA to authorize transferring
$8,180.51 (SMM) and $14,951.30 (Aroplax) from the TIF Surplus
Fund into a HRA Development Fund in order for the city to
recover all-costs associated with development of the SMM and
Aroplax projects.
It was the HRA's understanding that individual TIF District
project costs would stand-on-its-own. In observation, total
project costs were 18% and 20% of the bond issuance for the
SMM and Aroplax projects, respectively. Koropchak reminded
HRA members that these two projects were the first-time BDS
provided services for other financial packaging, therefore,
total accountabili ty was previously unavailable. The HRA
viewed the TIF surplus fund as a possible open checkbook to
any consultant. Surplus dollars were earmarked by the HRA as
potential dollars to assist a quality industrial or senior
housing project. The HRA members informed Koropchak to write
Mr. Pelstring a letter requesting the deletion of other
financial packaging such as Federal, State, or Regional
applications from the BDS/liRA contract. These costs to be
negotiated between BDS and the funding applicant (developer).
The HRA would retain BDS for TIF and marketing.
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HRA MINUTES
. JANUARY 6, 1993
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Tom St. Hilaire made a motion to transfer $8,180.51 and
$14,951.30 from the TIF Surplus Fund into a HRA Development
Fund. The motion was seconded by Al Larson and without
further discussion passed unanimously.
5. CONSIDERATION TO REVIEW AND ADOPT 1993 HRA OBJECTIVES.
The HRA members requested the deletion of inclusive of a
market study and site location from Goal No.1 and thereafter
agreed to the '93 objectives. The HRA requested an
accountability of all TIF dollars from the Finance Director.
Mr. O'Neill requested direction from HRA members regarding
cleanup and relocation of the JM Oil Property. The HRA
responded that JM Oil was responsible for cleanup of the
property along Fifth Street and thereafter would the HRA
encourage relocation to the industrial park through a possible
swap of lands or a low-negotiated price of the HRA lot.
6.
PROSPECT UPDATE:
a) Custom Canopy - Al though staff has met with Jim Beyl
regarding the building and site plans, Koropchak has yet to
receive the Letter of Intent for project development from the
company and therefore the $5,000 annual pay-as-you-go TIF
assistance has not been presented to the company.
b) All.-Temp Distribution - Enclosed with the agenda was a
project summary for All-Temp and the projected level of TIF
assistance available as recommended by BDS. Direct assistance
of $67,500 for land acquisition, $32,500 for site or on-site
utility development, and $50,000 for public utility
development. The company is looking to develop a 50,000 sq ft
refrigerated-storage facility on approximately five acres.
Due to the desire for rail, the Hoglund property becomes most
suitable. Potential of 20 full-time jobs. Mr. O'Neill
informed HRA members that East 7 Street is dedicated as a
State Aid Road and therefore will receive development funding.
The HRA agreed to a TIF go-ahead.
c) Wilson Tool International - Koropchak reported no news from
this Whi te Bear Lake company. Monticello is viewed as a
strong si te location contender and wi 11 be contacted upon
completion of the company's spread-sheet analysis.
d) Recreational Catalog and Warehouse/Retail Koropchak
requested direction from the HRA. This eastern company is
looking to establish a midwest recreational
( snowmobile/motorcycle ) parts and equipment market and to
construct an approximate 7,000 to 10,000 sq ft metal building
which would employ 10 full-time people at $5.50 per hour. The
greater portion of the facility would be for warehousing and
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HRA MINUTES
JANUARY 6, 1993
the catalog center and the smaller portion for actual retail
sales. Mr. Pelstring indicated that by statutory a TIF
District could be created, however, it becomes an HRA policy
decision. In a place like Crookston, Minnesota, the
opportuni ty would be jumped at. The HRA requested the
projected percentage of retail sales as compared to the
catolog sales before considering the use of TIF. Would the
company be a competitor of Moon Motors? Would the company
sell snowmobiles or motorcycles? If considered, it would be
the pay-as-you-go assistance much as the Martie's.
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OTHER BUSINESS.
a) Upon Brad Barger being out-of-town for two weeks, he has
requested the $20,375 TIF dollars for site improvements be
placed in an escrow account at Chicago Title. Project "site
improvements" meaning grading, curbs, water and sewer hook-up
and landscaping which have been fully completed and the HRA
furnished with evidence. Koropchak indicated to Brad that
although the HRA would agree that the curbing and landscaping
could not be completed until spring, the HRA has been
consistent to stick with the terms of a negotiated and
executed Development Contract. Koropchak said she'd bring the
request before the HRA and suggested that Brad, in the
meantime, produce evidence of the completed grading and
water/sewer hook-up costs for disbursement to Chicago Title.
The HRA upheld the terms of the executed Development
Agreement, however, agreed with Koropchak I s suggestion to
produce evidence of completed costs.
b) Koropchak reported on the January Winter NAHRO Conference
to be held in Bloomington of which she plans to attend.
c) HRA members were provided with a copy of the
liability coverage which is amended to cover the HRA.
requested additional information: What are the limits
amount of coverage?
City's
The HRA
and the
8. ADJOURNMENT.
The HRA meeting adjourned at 10:00 p.m.
()~ \..~~c:9S--
Ollie Koropchak, HRA Executive Director
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