HRA Minutes 07-01-1998
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
July 1, 1998 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chair Steve Andrews, Darrin Lahr, and Dan Frie.
MEMBERS ABSENT:
Vice Chair Bob Murray and Brad Barger.
COUNCIL LIAISON PRESENT: Brian Stumpf.
STAFF PRESENT: Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, and HRA
Attorney Steve Bubul.
GUESTS:
Larry Schlief
Greg Hayes, Shingobee, Inc.
1. Call to Order.
Chairperson Andrews called the HRA meeting to order at 7:00 p.m.
2.
Consideration to aoprove the January 7. May 6. and June 3. 1998 HRA Minutes.
Dan Frie made a motion to approve the June 3, 1998 HRA minutes. Seconded by Darrin
Lahr and with no additions or corrections, the minutes were approved as written.
3.
Consideration of adding agenda items:
None.
4. Consideration of a request for a buv out rather than contract for deed.
Larry Schlief informed the commissioners that four signatures were required to cure the
title defects. The necessary two signatures from Mike O'Connor have been secured with
signatures from two other individuals yet to be obtained, Schliefhopes for a closing in 30
days. Schlief requested the HRA consider a buyout rather than the contract for deed as
agreed upon in the Purchase Agreement. Lahr felt the need to preserve the HRA funds.
Frie also recognized the limited funds and asked if the purchase price would be
discounted with a buyout. Schlief was not interested in a discount. Andrews agreed to
preserve the HRA funds. Dan Frie made a motion re-instating the terms and conditions
of the executed Purchase Agreement of October 22, 1997 between the HRA and Schlief.
Darrin Lahr
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HRA MINUTES
JULY 1, 1998
seconded the motion and with no further discussion, the motion passed unanimously.
Commissioners agreed to allow ScWiefto remove the cloth-line and poles from the
property.
Noting O'Connor's interest to sell, HRA members agreed and directed Koropchak to
contact Deb Otten, power of attorney for the property, inquiring to the asking price.
Upon obtaining an asking price, Koropchak is to contact Commissioner Frie for further
direction to proceed.
5.
Consideration to adopt a resolution awarding the sale of. and providini the form. terms,
covenants and directions for the issuance of its $500.000 taxable tax increment revenue
note. Series 1998.
At the time the HRA authorized execution of the Private Redevelopment Contract
between the HRA and BBF Properties, Inc., the resolution awarding the sale ........ was
not approved. With a request for issuance and deliverance ofthe note by the developer,
Barry Fluth and lender, US Bank; the developer contacted Dan Wilson,
relocation/acquisition consultant, for a review of the relocation costs eligible for TIF
assistance according to the contract. A copy of Mr. Wilson's review was submitted to the
commissioners.
Attorney Bubul noted the not-to-exceed $500,000 TIF assistance first applies toward
relocation and demolition costs and thereafter site improvement costs. As agreed upon
the purchase of the leasehold interest associated with the Skillet Restaurant is considered
acquisition costs and not relocation costs. According to Mr. Wilson's letter, the eligible
relocation expenditures totaled $188,443 and the eligible demolition and site improvement
costs incurred to date totaled $156,987 for total expenditure of $345,400. Bubul
continued per the contract and note, the total $500,000 must be spend prior to deliverance
of the note. This is important as interest on the note starts to accrue on the date of
deliverance. Although no written evidence was received from the developer, it appears
$345,400 of the $500,000 has been expended leaving $154,600 yet to be expended. The
lIRA has two options: One, adopt the resolution and deliver of the note upon expenditure
of the total $500,000 subject to receiving acceptable written evidence. Or secondly,
adopt the resolution and deliver a note for expenditure of $345,400 and deliver a second
note upon expenditure of the remaining $154,600 subject to receiving acceptable written
evidence.
Steve Andrews made a motion to adopt the resolution awarding the sale of, and providing
the form, terms, covenants and directions for the issuance of its $500,000 taxable tax
increment revenue note, series 1998, subject to receiving written evidence acceptable to
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HRA MINUTES
JULY 1, 1998
the HRA Attorney and the Executive Director. Dan Frie seconded the motion and with no
further discussion, the motion passed unanimously.
6. Consideration to a:pprove ieneral guidelines and level ofTIF assistance for proiect no. II
within Redevelopment District No. 1-22.
Greg Hayes, Shingobee, Inc., informed HRA members that the need for the $150,000 up-
front TIF assistance still stands for redevelopment of the West Broadway Amoco station.
Upon a clearer definition as to the context of an Assessment Agreement which is a
recordable document between the developer, HRA, and County Assessor agreeing to a
certain minimum market value, Hayes indicated Shingobee's willingness to provide an
assessment agreement with a minimum market value between $540,000 to $560,000 for
land and building. An Assessment Agreement does not include a tax increment guarantee.
W olfsteller inquired as to the amount of the local contribution for Redevelopment District
No. 1-22. Bubul responded the local contribution for a redevelopment district is 5% and
said dollars pledged and contributed from the City's General Fund for development ofthe
Community Center are qualified costs for the local contribution.
Dan Frie made a motion approving up-front TIF assistance in an amount not-to-exceed
$150,000 for the acquisition and demolition costs associated with the redevelopment of
the West Broadway Amoco station, subject to execution of an Assessment Agreement and
execution of a Contract for Private Redevelopment between the HRA and Shingobee on
or before December 31, 1998 and subject to Council approval of a $150,000 loan to the
HRA for up-front financing. Damn Lahr seconded the motion. HRA members requested
the City Council review the 5% local contribution for TIF District No. 1-22 for
clarification of qualified costs and to re-affirm their previous commitment. With no
further discussion, the motion passed unanimously.
7.
Consideration of a counteroffer for the property located at 225 Front Street.
HRA members received copies of the letters between John Peterson, attorney for Rich and
Marian Carlson, and the HRA and a copy of the Option Agreement and Purchase
Agreement offered by the HRA in November 1997. With no request from the property
owners, no action was necessary.
8. Consideration to review the first draft of the proposed TIF guidelines.
HRA members elected to table this item until all commissioners are present.
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9. Consideration to authorize payment of monthly HRA bills.
Steve Andrews made a motion authorizing payment of monthly HRA bills including the
final payment to Hoisington Koegler for development of the Revitalization Plan. The
MCP determined work was completed by Hoisington per the contract. Dan Frie seconded
the motion and with no further discussion, the motion passed unanimously.
10.
Consideration of subcommittee rtWorts:
a) Marketing - Lahr reported Koropchak and he met once to expand the plan to
include the estimated time for completion and budget requirements.
b) Community Center - In the absence of Murray, Andrews reported Council will be
requested to consider purchase of the Grimsmo property for a purchase price of
$190,000, $5,000 greater than the appraisal. Council previously approved a
$30,000 annual debt increase for the community center project. This due to an
increase of square footage. The annual debt increase is within the $9.4 million cap.
Andrews was not aware of the final purchase price of the city hall and noted
perhaps TIF assistance would be requested for improvements.
c) MCP - Andrews reported MCP was concentrating on Riverfest activities.
d) Summarize Bus Tour/Golf Outing - Frie reported comments received were
positive of the day's event and BRA members agreed an annual event of some kind
was needed.
11. Consideration of Executive Director's report:
The report was accepted. Koropchak noted the included proposal from Northwest
Associates for development of a housing study.
12. Other Business.
None.
13. Adjournment.
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