HRA Minutes 03-06-1996
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, March 6,1996 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Al Larson, Vice Chairperson Brad Barger, Tom St.
Hilaire, and Roger Carlson.
MEMBERS ABSENT:
Everette Ellison.
STAFF PRESENT:
Rick Wolfsteller and Ollie Koropchak.
STAFF ABSENT:
Jeff O'Neill.
GUEST:
John Komerak, Prairie West Plus Developer
Mark Ruff, Publicorp
I. CALL TO ORDER.
Chairperson Larson called the HRA meeting to order at 7:00 p.m.
2.
CONSIDERATION TO APPROVE THE FEBRUARY 14,1996 HRA MINUTES.
Roger Carlson made a motion to approve the February 14, 1996 HRA minutes.
Brad Barger seconded the motion and with no corrections or additions, the minutes
were approved as written.
3.
CONSIDERATION TO REVIEW TH E FEASIBILITY ANALYSIS AND
FUNDING OPTIONS TO ENCOURAGE THE DEVELOPMENT OF PRAIRIE
WEST PLUS.
John Komerak informed members that his original proposal for Prairie West
included the development of seven single-residential lots. With the preliminary
concept approval forTIF assistance, the overall proposal has changed to include the
Praire West development of 6 twin-homes (12 units), the Praire West Plus I
development of 2.5 quad-homes (10 units), and Praire West Plus II development of
2 quad-homes (8 units). Square footage per unit ranges between 2,400 to 2,800 sq
ft at a value of $45 to $55 per square foot. Site and public improvements include
extensive landscaping with retaining walls, public utilities, private road with
easements, etc. Komerak has purchased the Prairie West parcel and has purchase
agreements on the Hanawalt and Banyai properties with options through June.
Purchase price of both properties totals $190,000. Projected time frame for
construction is three years, maybe, five years.
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HRA MINUTES
MARCH 6, 1996
HRA members and City Staff were encouraged by the total concept for
redevelopment of the Praire West, Praire West Plus I and II, and the Katzmarek
properties for the purpose of elimination of substandard properties, increase of the
tax base, recovery of City HACA Penalty, and the private investment of a local
developer. For the sake of public assistance discussions, the four redevelopments
are being treated independentl y.
Based on the above Praire West Plus I and II redevelopment assumptions and the
source in use statement of February 23, Mark Ruff concluded the proposed project
does warrant public assistance. A reasonable gross margin return for a developer
is 20-25 %, without public assistance the return to Komerak is 14 %. The Praire West
Plus I redevelopment would provide TIF assistance in the amount of $160,000 over
20 years.
Mark continued, the developer requested upfront TIF assistance of $1 60,000 and the
City donate the Gille property and extend utilities and specially assess each parcel.
Mark noted two concerns: The HRA normally prefers pay-as-you-go TIF assistance
as this reduces their risk and secondly, the City likelihood of donating the Gille
property and placing special assessments on the public improvements. Wolfstel1er
responded that normally a letter of credit is required upfront from the developer for
the public improvements. However, because of the total concept of this
redevelopment project, there is a good chance this may be waived and each parcel
could be assessed for its appropriate share. Wolfstel1er reported the City may
recover $8,500 of the $32,000 invested, recovery through the Petro Fund. Wright
County investment estimated at $11,000.
Not fully understanding the pay-as-you-go finance method, Komerak became
concerned with his upfront carrying costs associated with the acquisition of the
Hanawalt and Banyai properties in addition to the public improvement costs.
In order for the project to cashflow and to encourage redevelopment of the area,
Commissioner St. Hilaire recommended $80,000 upfront and $80,000 pay-as-you-go
TIF assistance and the HRA and City negotiate a land price for the Gille property
in order to write-down the cost to the developer. The HRA informed Mark Ruff
to move forward with the project and to contact the lender to explain the HRA' s risk
factors, the intent of the HRA to assist, and the timing of the TIF disbursement.
Mark reported the HACA Penalty for a Redevelopment District is a 7.5 % annual
contribution of which more than one-half can be spend outside the TIF project.
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HRA MINUTES
MARCH 6, 1996
Additionally, Mark requested John Komerak prepare a project analysis (proforma)
with a breakdown of acquisition, demolition, site and public improvements costs by
a phased-construction schedule and estimates of construction completion.
4.
CONSIDERATION TO REVIEW FOR ADOPTION A RESOLUTION FINDING
CERTAIN PROPERTY OCCUPIED BY A STRUCTURALLY SUBSTANDARD
BUILDING AND AUTHORIZING A PRE-DEMOLITION DEVELOPMENT
AGREEMENT BETWEEN THE HRA AND BARRY FLUTH.
Koropchak informed HRA members that the enclosed resolution for adoption
provides the HRA with a three-year window option to include the 111 West
Broadway parcel within a TIF-Redevelopment District if the Community/Riverfront
Study/Plan so recommends. If the resolution is not adopted and the attached Pre-
Demolition Development Agreement is not entered into by both the HRA and Mr.
Fluth, the HRA waives its option. The agreement is a non-enforceable as the
agreement states the HRA and Mr. Fluth agree to sit down and negotiate for the
intent to acquire. The agreement allows 45-days for negotiation which can be
extended. The agreement was faxed to Mr. Fluth prior to his out-of-town
engagement, I have heard no response from Mr. Fluth. His plans were to demolish
the substandard structure the week of March 11. In order to preserve all
redevelopment options, Roger Carlson made a motion to adopt the resolution finding
the III West Broadway parcel occupied by a structurally substandard building and
authorizing execution of the Pre-Demolition Development Agreement. The motion
was subject to Mr. Pluth's execution of the agreement. The motion was seconded
by Brad Barger and with no further discussion, the motion passed unanimously.
5.
CONSIDERATION OF BRA UPDATES:
a) Eminent Domain process - The HRA confirmed utilizing the services of
Wright Title and Conwortb, Inc. as recommended and outlined by Corrine
Thomson, Kennedy & Graven, letter of March 4, 1996.
b) HRA levy - For informational purposes only, Chairperson Larson requested
the maximum HRA levy potential for the Monticello HRA. Publicorp
calculated the maximum levy as $59,233 annually. Upon preparation of an
HRA budget, an HRA levy is submitted to City Council for aproval along
with the City Budget.
c) Approval of monthly bills - HRA members ok'd the monthly billings.
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HRA MINUTES
MARCH 6, 1996
6. CONSIDERATION TO REVIEW THE RFPs FOR SELECTION OF THREE
PLANNER CONSULTANT FIRMS TO INTERVIEW AND MAKE
PRESENTATIONS.
MCP Boardmembers Bob Bowen, Lois Maus, Bill Endres, Merrill Busch, Fran Fair,
Dick Frie, and Linda Smith, and City Assistant Administrator Jeff O'Neill joined the
HRA meeting at 8:00 p.m. Mep Boardmember Clint Herbst was absent.
Eight Request for Proposals were received prior to the deadline of March 4.
Because of the comprehensiveness of each proposal, Al Larson and Lois Maus were
unable to adequately review and call references on March 5. Other Mep
Boardmembers also received copies of the eight RFPs.
General comments made by MCP and HRA members:
* Not his profession, uncomfortable rating the RFPs.
* Recommend presentations of five firms, not three.
* Selection timeframe too fast, no way ready for presentation/interviews on March
20.
* Dollar amount not the issue, work approach with project director and
implementation are important.
* Microscopic project to review RFPs, not ready, recommend short list of three.
* Immediate review of RFPs, developed a list of five, need more time to
recommend three. No clear cut implementations.
* Check references for past historical projects of communities with less than 10,000
population. Good basis for selection.
* Recommend three to four firms at maximum for presentations.
* Recommend three, final selection of three on March 20.
* Recommend three firms.
* Delay of presentations, effect on timeliness to hire project manager.
* Delay of presentations, may effect the energy and attitude of volunteers.
* All firms had some experience with riverfront development.
* Implementation plan, after results of market and [mandaI feasibility studies.
Dick Frie left the meeting early.
Jeff O'Neill reviewed the criteria rating sheet developed to assist each HRA and
MCP member who participate in the review and selection process. The rating sheet
follows the approach of the returned RFPs and is for utilization as a guide and for
consistency.
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HRA MINUTES
MARCH 6, 1996
All members present agreed, the importance of selecting a consulting firm warrants
more time for review and study of the RFPs prior to the selection of firms for
presentations and interviews. It was further agreed, each Mep and HRA member
will review and rate the eight RFPs and return the criteria rating sheets to Jeff
O'Neill by Monday, March 18, 4:30 p.m. Jeff will calculate the points of each
returned criteria sheet to determine the four highest rating firms. On March 20,7:00
P.M., City Hall, the Mep and HRA members will meet to hear the criteria rating
results. O'Neill will contact the eight consulting firms with a notification delaying
the date for presentations and interviews.
7. OTHER BUSINESS.
Koropchak reminded HRA and Planning and Parks Commission members that the
joint meeting scheduled for Wednesday, April 10, at 7:00 P.M. was cancelled because
of a delay in the process to adopt the Monticello Comprehensive Plan.
8.
ADJOURNMENT.
The BRA meeting adjourned at 8:50 P.M.
G~~J1~~~
Ollie Koropchak, Executive Director
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