HRA Minutes 03-03-1993
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, March 3, 1993 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Ben Smith, and Tom St.
Hilaire.
MEMBERS ABSENT:
Lowell Schrupp and Everette Ellison.
STAFF PRESENT:
Rick Wolfsteller, Jeff O'Neill and Ollie
Koropchak.
GUEST:
Brad Larson, Metcalf & Larson; Skip Sorensen,
JJS Architects; and Mike Schoenecker,
Advantage Marketing.
1. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00
p.m.
2 .
CONSIDERATION TO HEAR SENIOR HOUSING DEVELOPMENT PROJECT
CONCEPT AS PREPARED AND PRESENTED BY BRAD LARSON AND SKIP
SORENSEN.
Mr. Brad Larson presented background information to the HRA
members referencing his previous experience in senior housing
development and of his conversation with the local Hospital
District who expressed an identified need; however,
unconfirmed need for congregate or assisted-living senior
housing. Mr. Brad Larson plans to make a concept presentation
to the Hospital Board in March.
Under the Farmers Home Administration (FmHA) Program, the
qualifying annual moderate income for singles is $27,000 and
for couples is $30,000. Low-moderate income applicants
receive priority over above-moderate income applicants;
however, once a resident no one is evicted. One bedroom units
are 580 sq ft and have a value of less than $40,000 per unit
for land and bui Iding. Subject to a market study, the
proposed 40 unit three-story congregate senior housing
facility would consist mostly of one-bedroom units with
kitchens. The facility would be served by a bell system to
the emergency room, an on-site caretaker, and an elevator.
The 8,000 sq ft commons area, 20% of the gross base, would
consist of a community, dining, and warming-kitchen room and
a laundry room on each floor. Additional services are add-on
costs.
Mr. Brad Larson reported that the Broadway Square, River Park
View, Ridgemont, and Cedarcrest subsidized-senior housing
apartments are full.
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HRA MINUTES
MARCH 3, 1993
The site proposed by Mr. Brad Larson requires purchase and
demolition of the three structures to the west of the Hospital
District Ambulance building along East Broadway. With the
anticipated purchase/demolition costs and FmHA site appraisal
of $100,000, Mr. Brad Larson anticipates a financial site gap
of $150,000. Projected annual tax increment is $25,000 on the
proposed $450,000 senior housing land and building. Time-line
for application, funding, and construction is two years. Mr.
Brad Larson would need a letter from the HRA verifying secured
site purchase options. Mr. Brad Larson indicated there would
be no relocation costs and requests control of the demolition.
An FmHA appraisal is also necessary.
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The group looked into the future and the potential of a
Monticello Senior Campus at the proposed site. The campus
would include a new senior center and additional market-rate
and/or subsidized senior housing facilities. The area
identified was to the east of Dayton Street between East
Broadway and East River Street. Mr. Brad Larson suggested the
HRA purchase the ambulance building and relocate it to the
east of the Monticllo Clinic. Brad accepted the HRA's request
to inquire of the acquisition costs associated wi th the
properties identified for the potential senior campus. Mr.
O'Neill indicated that the PZ-M zoning was appropriate.
The HRA thanked Mr. Brad Larson, Sorensen, and Schoenecker for
their impressive presentation. The HRA elected not to endorse
a developer at this time in order to honor its invitation and
hear a presentation by the Guardian Angels Foundation.
Koropchak informed members that the Foundation, a non-profit
organization, does pay property taxes at a lower-rate similiar
to a limited-partnership; however, a non-profit organization
does not pay income tax. The Guardian Angels Board of
Directors will meet on March 24 and review the HRA's
invitation for a presentation. The HRA was encouraged by the
local Hospital District's interest to provide services to a
proposed senior facility. Mr. Brad Larson indicated the
Foundation was a fine, well-run organization; however, stated
it is ruled by a Board.
HRA recommended a letter be sent to Mr. Brad Larson stating
their appreciation of his time and that the HRA was very
impressed with his presentation and concept. Additionally,
since the developer indicated the proposed senior housing
project would cashflow, the HRA wanted to be on public record
as viewing the project as viable. The Ci ty Council is be
advised and invited to the next presentation.
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HRA MINUTES
MARCH 3, 1993
3. CONSIDERATION TO APPROVE THE FEBRUARY 4, 1993 HRA MINUTES.
Tom St. Hilaire made a motion to approve the February 4, 1993
HRA minutes. Seconded by Ben Smith and with no additions or
corrections the minutes were approved as written.
4.
CONSIDERATION TO ADOPT A RESOLUTION AUTHORIZING PREPARATION OF
TAX INCREMENT FINANCE PLAN FOR ECONOMIC DISTRICT NO. 1-15 AND
REQUESTING CITY COUNCIL TO CALL FOR A PUBLIC HEARING (Custom
Canopy) .
The HRA agreed to Mr. O'Neill's suggestion that the annual
$5,000 pay-as-you~go TIF assistance be increased to $6,000
annually if the completed project consist of a more extensive,
greater than required in 1-2 zoning, landscape treatment along
Fallon Avenue and/or consist of a 50% contrasting exterior-
wall material treatment on the Fallon Avenue and Dundas Road
sides of the proposed metal facility. The increase was
suggested as an incentive for the developer, thereby,
encouraging an aesthetically-pleasing transition from the I~2
to BC zoning across the street. Mr. Pelstring's projections
indicated an annual tax surplus of $3,600 after the
Administration Expense, TIF Penalty, and TIF payments were
deducted.
Ben Smith made a motion to adopt the resolution authorizing
preparation of the Tax Increment Finance Plan for Economic
District No. 1-15 and requesting the City Council call for a
public hearing. Said public hearing date to be April 12,
1993. Tom St. Hilaire seconded the motion and with no further
discussion, the motion passed unanimously.
5. CONSIDERATION TO REVIEW INFORMATION ON THE RICHFIELD
REDISCOVER CONCEPT AND TO AUTHORIZE FURTHER DIRECTION.
At the February 4 HRA meeting, Koropchak reported on the
Richf ield Rediscover Program stating the HRA markets and
offers to purchase substandard homes at fair market value,
demolishs the homes, and sells the land at fair market value
to an interested developer. The developer agrees to construct
a new home based on Richfield's HRA requirements and the home
is made available to first~time home buyers. The Monticello
HRA requested additional information.
On February 12, Koropchak received the additional information
from Mr. Bruce Nordquist. And on February 16, Koropchak
mailed HRA members a copy of the Richfield-Rediscover General
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HRA MINUTES
MARCH 3, 1993
Program Summary, Building Sites Available, Program Process
Summary, List of Interested Builders, and Marketing Brochure
for review.
Mr. Nordquist indicated his willingness to meet wi th the
Monticello HRA. The Richfield Rediscover Program is located
within a 1990 created Redevelopment or Housing District
project area.
The HRA requested further research on marketing costs and if
the concept applied to rental units prior to any BRA decision
or a visit from Mr. Nordquist.
6.
CONSIDERATION TO REVIEW INFORMATION ON THE MINNESTOA HOUSING
FINANCE AGENCY PROGRAM AND TO AUTHORIZE FURTHER DIRECTION.
Based on the HRA's February 4 request for further information,
Koropchak reported that the Minnesota Housing Finance Agency
(MHFA) funding application deadline for the Minnesota City
Participation Program (MCPP) was April 15, 1993. The MHFA
sells mortgage revenue bonds on behalf of local governments to
assist them in meeting locally identified housing needs.
Under the program, local governments may adjust income and
house price limits and implement other administrative
requirements. For Wright County, the maximum adjusted gross
household income for newly constructed homes is $38,500 and
for one, two-family existing homes is $34,500, and the maximum
acquisition cost for newly constructed one-family, existing
two-family homes is $95,000 and for one-family existing homes
is $85,000. The program is for first-time home buyers with
interest rates of approximately 1% to 1.5% below market
mortgage interest rates.
After completion of MHFA application for funding, the program
requires very Ii ttle administrative time as the commi tted
lending institutions services the first-time home buyer's loan
application and closing. In Monticello, Liberty Savings is a
committed lender through the use of Wright County funds.
Koropchak reported that in the last year the HRA office has
received an increase of telephone calls inquiring to the
availability low-moderate housing. Additionally, two local
lending institutions expressed an interest in the program. As
stated last month, the program serves as an excellent public
relations tool, requires little administrative time, local
governments may set requirements, and the funds would be
allocated specifically for the City of Monticello.
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HRA MINUTES
MARCH 3, 1993
The HRA inquired of the cost, a modest processing fee of $100
to $600 for allotment size of $250,000 to $3,250,000,
respectively.
Mr. O'Neill suggested the program may not be as popular today
because of low market mortgage interest rates. The HRA was
not interested in the program as they saw no need. They
encouraged interested lending institutions to apply and pay
the processing fee.
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CONSIDERATION TO REVIEW THE YEAR-END SUMMARY OF THE HRA FUND
AND TIF-DEBT SERVICE FUNDS.
Ci ty Administrator Wolfsteller reviewed the year-end summaries
with HRA members noting deficits in IXI District due to HRA
loan payback to city, Remmele District due to $55,000 excess
incentive, and Shingobee District due to preparation fee. He
would need to check on the reason for the Martie District
def ici t. The HRA inquired of the dollars avai lable for
spending? Mr. Wolfsteller stated his answer now is $135,093.
He would need to project the revenue and the outstanding bond
debt for each district by the life duration before stating
future spending dollars. The HRA requested this information
and requested to review the proposed annual HRA budget in July
prior to submission to the City Council.
Mr. Wolfsteller informed HRA members that the City's Liability
coverage was $1.6 million, renewed annually.
8. CONSIDERATION OF PROSPECT UPDATES:
a) Wilson Tool Company The company has made no si te
location decisions, Monticello remains in the running.
b) All-Temp Distribution ~ A commitment from Mr. John Holman
is based on the future availability of rail. A meeting
was held with the Hoglund family regarding the need to
develop public improvements.
c) Recreational Parts and Equipment - Koropchak reported she
had informed the company of the HRA's decision to assist
the project through the TIF pay~as-you~go method based on
the generated increment of the warehouse/catolog area
only. The company has made no decisions.
9. OTHER BUSINESS.
Next regular HRA meeting is scheduled for April 7.
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HRA MINUTES
MARCH 3, 1993
10. ADJOURNMENT.
Al Larson made a motion to adjourn the HRA meeting, seconded
by Tom St. Hilaire. Wi th no further business, the meeting
adjourned at 9:40 p.m.
a ~ '< wr:t;/J;:) ..~
Ollie Koropchak, HRA xecutlve Dlrector
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