HRA Minutes 05-06-1998
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, May 6,1998 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chair Steve Andrews, Vice Chair Bob Murray, Damn Lahr, and
Dan Frie.
MEMBERS ABSENT:
Brad Barger.
COUNCIL LIAISON ABSENT:
Brian Stumpf
STAFF PRESENT: Executive Director Ollie Koropchak.
GUESTS:
Amy Rolfe, Skipper's Pool & Spa
Barb Esse, MCP Chairperson
Rita Ulrich, MCP Manager
1. Call to Order.
Chair Andrews called the HRA meeting to order at 7:00 p.m.
2.
Consideration to approve the January 7, 1998. April L 1998, and April 15, 1998 HRA
minutes.
Damn Lahr made a motion to approve the April 1, 1998 and April 15, 1998 HRA
minutes. Dan Frie seconded the motion and with no corrections or additions, the minutes
were approved as written.
3. Consideration of adding items to the agenda.
Koropchak requested an addition under 13b Other Business: Consideration to modify the
Redevelopment Contract between HRA and BBF Properties.
4. Consideration to al'prove a resolution adopting the modified plan for Central Monticello
Redevelopment Project NO.1 and establishment and adoption of the plan for TIP District
No. 1-23.
HRA members received a copy of the Plan for TIP District No. 1-23. They noted the
budget of$1,105,000 and estimated annual net tax increment of$121,542 were high.
The stated budget allows for increased project costs without the need to modify the Plan
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HRA MINUTES
MAY 6, 1998
responded Koropchak. And the stated tax increment is based on a greater per square foot
value of the land and building because the financial consultant believes the County
Assessor's value are low and values will increase shortly. Koropchak noted the developer,
Allied Companies, and tenant, Midwest Graphics, will provide documentation to satisfy
the <<but for" test. TIF District No. 1-23 is an Economic District with a maximum life of
eleven years. The district will create jobs and increase the tax base of the state and local
community. The tenant agrees to wage levels between $8.24 to $12.00 ph and agrees to
pay a wage level of at least 160% of the federal minimum wage requirement for at least
90% of its employees during the life of district.
The Planning Commission approved a resolution finding the TIF Plan to be consistent with
the Comprehensive Plan ofthe City.
Dan Frie made a motion to approve a resolution adopting the modification to the
Redevelopment Plan for Central Monticello Redevelopment Project No. 1~ and
establishing TIF District No. 1-23 therein and adopting the related TIP Plan therefor. The
motion was seconded by Bob Murray and with no further discussion, the motion passed
unanimously.
5.
Consideration to approve the terms and conditions of the Contract for Private
Redevelopment between the HRA and Allied Companies, LLC.
Koropchak reviewed the proforma submitted by the developers which required TIF
assistance in the amount of $250,000, stating the request appeared high when calculating
the numbers. The contractor submitted site improvement costs of$122,211 and the
developer requested land acquisition assistance. The construction cost estimate of$32.72
per sq ft on the proforma appeared low as the Assessor's value on the manufacturing
portion only is about $27.50 per sq ft. Additionally, the permit fee is listed at $1,000.
Koropchak was unable to reach Paul Ederer for an explanation.
Based on the TIP cash flow projections, 50% of the tax increment over the life of the
district is about $181,000 NPV. Koropchak suggested the storm sewer trunk and sanitary
sewer and water trunk fees of about $25,000 be earmarked as the 10% local contribution.
Damn Lahr made a motion agreeing to TIP assistance in an amount of$125,000 for site
improvements and $56,000 for land write-down subject to verification of construction
costs or satisfaction of the <<but for" test. The HRA to retain the $5,000 pre- TIF deposit
and receive the first 20% of the annual tax increment. The developer to receive the
remaining annual tax increment for not-to-exceed total TIP assistance of$181,000. Dan
Frie seconded the motion and with no further discussion, the motion passed unanimously.
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HRA MINUTES
MAY 6, 1998
6. Consideration of a request from the MCP relating to the use of the HRA lot on West
Broadway.
MCP President Barb Esse and Manager Rita Ulrich appeared before the HRA with a
proposed use of the vacant HRA lot at III West Broadway. The lot adjoins the office of
the MCP which is convenience for light maintenance of the property by the MCP. To
create an attractive and inviting public space, the MCP proposed the front 50 feet be used
as a gathering place and walkway via the purchase and placement of four picnic tables
with umbrellas, two park benches, fencing, plantings and miscellaneous at an estimated
cost of $3,804.40. This meets the pedestrian friendly spirit of the revitalization plan.
Secondly, they proposed that the remaining portion of the lot be used by Skipper's Pool
and Spa as a display area allowing room for the walkway. This to encourage business
expansion and revitalization of downtown and to eliminate the need for a conditional use
permit relating to expansion of a display area on the existing parcel.
Koropchak reported if an HRA receives income from a property it no longer is tax
exempt. Attorney Bubul recommended a lease agreement be drafted, executed, and
recorded and would necessitate the HRA to hold a public hearing. Koropchak noted in
conversation with the County Assessor if the use is for a limited time perhaps the property
could be considered seasonal and not taxed. Commissioners discussed options which
would result in a good solution for all concerned. The commissioners agreed their goal as
owner of this parcel was to provide the HRA with the opportunity to monitor future plans
for redevelopment of the area.
Steve Andrews made a motion approving expenditures in an amount not-to-exceed
$3,804.40 for the MCP to purchase aesthetic improvement fixtures for the southerly one-
half of the HRA lot at III West Broadway. This to test-the-water for use of a public
gathering place concept. Darrin Lahr seconded the motion and with no further discussion,
the motion passed unanimously. The motion was subject to a maintenance agreement
letter from the MCP.
Dan Frie made a motion allowing Skipper's Pool and Spa, Scott Rolfe, the use of the
northerly one-half of Lot 7 and a portion of Lot 8, Block 52, Original Plat, except the area
designated as walkway, through a period ending August 1998 with the following
conditions: Skipper's Pool and Spa must indemnifY the HRA, use must be for display
purposes only, and the use must be consistent with the conditional use permit. The
motion was seconded by Steve Andrews and with no further discussion, the motion passed
unanimously. The commissioners approved the motion because Skipper's Pool and Spa is
adjacent to the unused described parcel, is consistent with the conditional use permit and
will assist a new business.
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lIRA MINUTES
MAY 6, 1998
7. Consideration of interest to provide TIF assistance to Diversifoam Products.
HRA members were asked of their interest to provide TIF assistance to Diversifoam
Products. The Prospect Team and some HRA members visited the headquarter facility in
Rockford, MN, on two different occasions. Both groups saw the company as productive
and well managed but gave the proposed project a lukewarm rating. The company
requested a reasonably-timed response.
Lahr had no problems with the air emissions; however, he felt the proposed project
included no skilled jobs and a steel building utilizing a large amount ofland for outdoor
storage. He was not interested in providing TIF. Frie agreed no free land. Murray did
not have enough information for a decision: however, did recognize the project was a
satellite facility with no skilled jobs. Darrin Lahr made a motion to provide no TIF
assistance to Diversifoam because the project did not meet the TIF criteria. Steve
Andrews was uncomfortable with the rationale for denial. Lahr amended his motion: to
provide no TIF assistance to Diversifoam because the proposed satellite project included
no top management jobs, an excess amount of outside storage, and a building exterior of
lesser long term value. Steve Andrews seconded the motion and with no further
discussion, the motion passed unanimously.
8.
Consideration to hear follow-up on the difference between the assessed value and certified
real estate value for TIF District No. 1-18.
Administrator W olfsteller researched each file card at the County Assessor's Office and
found each single family resident and twin home had a typical EMV increase from payable
1998 to payable 1999 with the exception of one twin home unit which increased from
$96,500 to $194,600. This property was only 50% complete on January 2, 1997.
Previously, Bob Murray requested the HRA consider modifYing the Contract for Private
Redevelopment between the HRA and RDI to use the certificate of real estate value
instead ofthe assessor's value. With the reported update on the estimated market values,
Murray withdrew his request.
9. Consideration of interest to purchase the property located at 516 Maple Street.
At the request of the Assistant Administrator, the HRA was requested to consider
purchase of the property located at 516 Maple Street. The parcel lies within the proposed
redevelopment area of the community center. Although the parcel lies within the area, the
parcel is not needed in order to proceed with Phase I of the community center but would
be necessary for Phase II which includes the ice arena.
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HRA MINUTES
MAY 6, 1998
Lahr asked: Why do we need it? The ice arena is far-out. Andrews asked if the lIRA
could cashflow the purchase? Damn Lahr made a motion stating the lIRA was not
interested in purchasing the property at 516 Maple Street as this time because of the
HRA's lack offunds and recommended the City Council consider the acquisition. Steve
Andrews seconded the motion and with no further discussion, the motion passed
unanimously.
10. Consideration to review the list of site locators, builders. and others for invite to golf
outing and other related plans.
Koropchak reported the lower list of businesses were taken the membership of the
National Association ofIndustrial and Office Properties. Murray saw no purpose to invite
builders but to invite developers only. The upper list consist of local lenders and existing
BRE contacts. Frie made a motion to invite the bottom left-hand businesses with two
gratis tickets and the upper list of individuals or businesses with one gratis ticket. Bob
Murray seconded the motion and with no further discussion, the motion passed
unanimously. The golf course can fit 120 golfers reported Frie.
11.
Consideration to review and discuss TIF policies from the City of Savage and appoint two
commissioners to prepare a draft copy ofTIF Policies for review.
In lieu of saving time, Damn Lahr made a motion appointing Commissioners Andrews and
Lahr to a subcommittee for the purpose of preparing a draft copy of TIP Policies for
review at the June HRA meeting. Dan Frie seconded the motion and with no further
discussion, the motion passed unanimously.
12. Consideration to authorize payment ofmontWy HRA bills.
Bob Murray made a motion authorizing payment of the montWy HRA bills and
authorizing submittal of invoices to Charlie Pfeffer and the amount due of$I,825.66 as
reimbursement to the HRA for services rendered relating to the Green Acres issue. The
lIRA paid $1,500 of the total $3,325.66 expenditure through the April 7, 1998 invoice.
Darrin Lahr seconded the motion and with no further discussion, the motion passed
unanimously.
13.
Consideration of Executive Director's report:
b) Add on item - HRA members were requested to consider modifYing the Contract
for Private Redevelopment between the HRA and BBF Properties, Inc. The
contract states the redeveloper shall commence construction of the minimum
improvements by May 1, 1998. The request is to modifY the construction
commencement date from May 1 to June 1, 1998 for compliance of the contract.
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HRA MINUTES
MAY 6, 1998
Most important to the HRA is the scheduled construction completion date of
December 31, 1998. Damn Lahr made a motion to modify the commence
construction date for the minimum improvements from May 1, 1998 to June I,
1998 within the Contract between the lIRA and BBF Properties, Inc, Bob Murray
seconded the motion and with no further discussion, the motion passed
unanimously.
lIRA members accepted the report as written,
14,
Consideration of committee reports:
a) Small Group Community Center - Murray reported the Chamber requested space
in the community center for their office and related conference needs, No rental
fees have been determined. The National Guard's $1.5 million has a new twist
with the need for a secured space for their humbies, Construction costs will be
reviewed at the next meeting which are assumed higher than originally projected,
b) MCP - Andrews no report as absent from meetings.
c) Marketing - Lahr reported the subcommittee continues to meet and all agree to
print a marketing piece with no implementation plan or sufficient staff is not the
goaL
d) Golf Outing - Frie reported perhaps the Legion would supply a free lunch, Lahr
asked if that was the image of Monticello, the lIRA wanted to market? It was
suggested to check with the Monti Club and River Inn on menu and costs?
15. Other Business.
Murray stated he would be out-of-town.
16, Adjournment.
~e HRA if:.1tffied at 930 pm
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lIRA Chair
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