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HRA Minutes 08-05-1998 . . . MINUTES REGULAR MEETING - MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, August 5, 1998 - 7 p.m. Members Present: Chair Steve Andrews, Vice Chair, Bob Murray, Darrin Lahr, with Brad Barger arriving at 7:30 p.m. Members Absent: Dan Frie Council Liasion Absent: Brian Stumpf Staff Present: Treasurer Rick Wolfsteller and Executive Director Ollie Koropchak 1 . Call to Order. Chair Steve Andrews called the HRA meeting to order at 7:05 p.m. 2. Approval of minutes of Mav 6 and Julv 1, 1998 HRA meetings. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DARRlN LAHR TO APPROVE THE MINUTES OF THE REGULAR HRA MEETINGS HELD MA Y 6 AND JULY 1,1998, AS WRITTEN. Motion carried unanimously. The January 7, 1998 minutes are not ready for approval at this time. 3. Consideration of adding items to the agenda. A. Executive Director Ollie Koropchak welcomed Nancy Whalen, a new employee, to the HRA meeting. Ms. Whalen will be taking the minutes at the HRA meetings. B. Ms. Koropchak asked the guests to identify themselves for the record. C. Under Item #18, a letter from Marquette Bank regarding a subordinate agreement. D. Proposed 3 Walnut Street purchase and tenant. E. Request to move the HRA regular meeting time to a different Wednesday night because of a conflict that Mayor Fair has with the first Wednesday of the month. F. Under Item #15, a Declaration of Conflict ofInterest from Bob Murray. 1 . . . 6. HRA Minutes - 8/5/98 4. Consideration to hear preliminary concept update for redevelopment of the North Anchor. Ms. Koropchak introduced Brad Johnson. Mr. Johnson gave the HRA an update on the process for redevelopment of the North Anchor. He stated that he felt a housing development, a hotel and a good size family restaurant would make good use of the area. This concept includes an exchange of land to preserve the parks and vacating Front Street would add additional parking. Mr. Johnson stated that Blackwoods Restaurant has expressed an interest in opening a new restaurant in a community this size. Blackwoods currently has restaurants in Duluth and 3 other northern cities. Representatives from Blackwoods will be visiting Monticello in the near future. Mr. Johnson stated that he recently visited the Parks Commission and they were receptive to the concept. It is estimated that this project would increase the park by 50%. He felt that it would be good strategy for the HRA to continue acquiring land as it comes up for sale. HRA Commission asked questions of Mr. Johnson regarding the impact of acquisitions on the foreseeable value of surrounding land. Also, whether or not the developers will need a liquor license and traffic issues. 5. Consideration to approve a resolution adopting the modification for Central Monticello Redevelopment Proiect No. 1: and establishing TIF District No. 1-24 therein and adoptin~ the related TIF plan therefor. (St. Benedict's)'s). Ms. Koropchak introduced this item and asked Mr. James Hiatt, St. Benedicts, to review the design of the proposed independent facility for seniors. Mr. Hiatt covered in great detail the proposed design and layout of the units. He stated that they are close to finalizing their drawings. The project would not be done in phases. Completion should be June or July, 1999. Mr. Hiatt stated that they have what is needed from the City and will continue with the platting process. A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY BOB MURRA Y TO APPROVE A RESOLUTION ADOPTING THE MODIFICATION FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1; AND ESTABLISHING TIF DISTRICT NO. 1-24 THEREIN AND ADOPTING THE RELATED TIF PLAN THEREFOR. Motion carried unanimously. Consideration of an update on the Community Center Proiect: Cost estimates and funding. Ms. Koropchak introduced Mr. Rusty Fifield, Ehlers & Associates, reviewed a memo regarding the finance plan for the Community Center with a proposed schedule of events in the bond issuing process. He went over the original cost estimate verus the current 2 . . , HRA Minutes - 8/5/98 estimate, cash flow projections and debt structure. Mr. Mark Wentzell, AKA, Inc., went over the design of the building. He covered the exterior materials to be used and the layout ofthe inside ofthe Community Center. Mr. Wentzell stated that bid opening is scheduled for October 22, 1998, with groundbreaking on November 1, 1998. Completion is scheduled for November/December 1999. 7. Consideration to review the ooerating agreement for the community center between the City and National Guard. Attorney Dan Greensweig reviewed the proposed operating agreement with the City and National Guard. He stated that the HRA is not a party in the agreement but felt that the HRA should be updated since they will issue the bonds. The State will own the armory and lease it to the City of $1.00 a year. The City will do routine maintenance of repairs and a 90/1 0 split for real estate taxes. Also, the City will have total control over the lease of facility except when the guards are scheduled to use the facility. 8. Consideration to accept a counter-offer for the prooertv located at 225 Front Street (Rich and Marian Carlson). Ms. Koropchak reviewed the above item. An Option Agreement and Purchase Agreement was offered to the Carlsons in November 1997, the purchase offer price was $130,000 as is. The appraisal value was $165,000. The Carl sons counter-offered in amount of $179,500 as is, closing on or before 18 months, the City would reimburse $300 survey fee, HRA would be responsible for all closing fees, and the Carl sons would be allowed to remove certain residential items. Also, they would be permitted to use the HRA garage at no cost, and be allowed to remove fallen trees. The "as is" appears to be in conflict with request for removal of items and trees. After discussion was held between commissioners on how this property would impact the North Anchor and funding, the commissioners felt that a special meeting should be held with Treasurer Rick Wolfsteller, Rusty Fifield, Mark Ruff, and Ollie Koropchak to review TIF and HRA General Fund finances. The HRA staff will gather information enabling the commissioners to set priorities. A MOTION WAS MADE BY DARREN LAHR AND SECONDED BY BOB MURRA Y TO TABLE ANY ACTION RELATING TO THE JULY 24, 1998, COUNTER-OFFER FROM THE CARLSONS. Motion carried unanimously. A SECOND MOTION WAS MADE BY BOB MURRAY AND SECONDED BY STEVE ANDREWS AUTHORIZING HRA STAFF AND THE HRA FINANCIAL CONSUL T ANTS TO PREP ARE CURRENT CASH FLOW STATEMENTS AND CASH FLOW PROJECTIONS, AND TO CALL A SPECIAL MEETING OF THE HRA TO REVIEW THE PREPARED FINANCIAL INFORMATION THEREBY ASSISTING THE HRA IN BUDGET PLANNING FOR 1999 AND TO SERVE AS A 3 . . , HRA Minutes - 8/5/98 GUIDE FOR REDEVELOPMENT DECISIONS. Motion carried unanimously. Ms. Koropchak will set-up meeting time. 9. Consideration to review the appraisal for the property located at 218 Front Street and authorization to proceed. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE ANDREWS TO TABLE THE ABOVE ITEM. Voting in favor: Steve Andrews, Brad Barger, and Darrin Lahr. Opposed: Bob Murray. Motion carried. 10. Consideration of a proposal for a market identity study and to share in it's funding. Ms. Koropchak introduced MCP Chair Barb Esse Ms. Esse went over seyeral items regarding developing community identity and marketing strategies. There is a need to have a draw to attract people to the downtown area. She stated that Monticello does not want to be considered a suburb. There is a need for long term revitalization for the downtown area. Ms. Rita Ulrich spoke next regarding financing the proposal to develop a community identity. She requested the HRA partner as a fiscal agent in grant applications. Discussion was held on whether or not this was the appropriate time to commit to this project given the HRA has so much to consider right now. It was felt that money and effort should be spent on what we have going right now. The commissioners felt that this discussion would be better held after the review of the HRA finances. The MCP is asking the HRA for $9,250 (60%) of the estimated total project cost. Ms. Ulrich then asked if the HRA would be willing to make application for a grant in the name of the HRA. Mr. Dan Greensweig, City Attorney, recommended that the HRA review the grant application very carefully. A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY DARRIN LAHR ENABLING THE MCP TO USE THE HRA AS AN AGENT FOR GRANT APPLICATION FOR FUNDING THE COMMUNITY IDENTITY AND MARKETING STRATEGIES PLAN SUBJECT TO LEGAL REVIEW AND TO TABLE ACTION FOR CO-FUNDING UNTIL THE HRA HAS REVIEWED THEIR FINANCES. 4 . . , HRA Minutes - 8/5/98 11. Consideration to accept for record the Declaration of Potential Conflict of Interest from Commissioner Brad Barger. Commissioner Brad Barger submitted a Declaration of Potential Conflict of Interest as one of the partners of Blue Chip Development Company. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY STEVE ANDREWS TO ACCEPT, FOR THE RECORD, THE DECLARATION OF POTENTIAL CONFLICT OF INTEREST FROM COMMISSIONER BRAD BARGER. Voting in favor: Bob Murray, Darrin Lahr and Steve Andrews. Abstaining: Brad Barger. Motion carried. 12. Consideration of a request for the assistance for development of a manufacturing facility and authorization to proceed (Blue Chip Development Company). Ms. Koropchak reviewed Blue Chip Development Company's request for TIF assistance. Blue Chip plans to contract a 12,000 sq ft steel manufacturing office facility. B & B Metal Stamping, Inc. would possibly lease the entire building. Average wages, without benefits, are $14.10 per hour. The commissioners reviewed and found the proposed project to meet the local TIF policies. Building proformas submitted by the accountant for Blue Chip indicated a rate ofretum of 10.65% with TIF assistance and 6% without TIF. With the proposed project meeting the qualification of the local and state TIF requirements, a MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE ANDREWS AUTHORIZING EHLERS & ASSOCIATES AND KENNEDY & GRAVEN TO PREPARE FOR ESTABLISHMENT TIF DISTRICT NO. 1-25, AN ECONOMIC DISTRICT FOR BLUE CHIP DEVELOPMENT COMPANY SUBJECT TO SUBMITTAL OF THE PRE-AGREEMENT AND $5,000 CASHIER CHECK AND APPROVING PAY-AS-YOU-GO TIF ASSISTANCE IN AN AMOUNT NOT-TO- EXCEED $32,000 FOR SITE IMPROVEMENTS. THE COMMISSIONERS ELECTED TO MAKE AN UP FRONT LOCAL CONTRIBUTION OF $8,000 OF WAC/SAC FEES. 13. Consideration to hear preliminary concept for development of low to moderate income family housing and request of interest for use of TIF. 14. Ms. Koropchak informed the HRA staff that the above item was withdrawn from this agenda per applicant's request. Consideration to review the first draft of the proposed TIF guidelines. The above item was tabled. 5 . . . HRA Minutes - 8/5/98 15. Consideration to authorize payment of monthly HRA bills. A MOTION WAS MADE BY STEVE ANDREWS AND SECONDED BY BRAD BARGER TO APPROVE THE MONTHLY HRA BILLS. Motion was carried. unanimously. 16. Consideration of executive director's report. Ms. Koropchak reviewed the director's report. Under item "D", it was decided to rent the property for $550 a month. Ms. Koropchak will review the two rental applications and proceed with renting the property. The report was accepted by the commissioners. 17. Consideration of committee reports: A. Bob Murray gave an update on the community center. He stated that a possibility had existed that, due to the railroad, the community center would be moved slightly on the property. However, Burlington Northern will remove the spur so that the building will not have to be moved on the property. Also, we should be able to get everything we want within the budget. Bob suggested that HRA contact members of the community to sponsor rooms in the community center. Another alternative would be to apply for grant funds. B. Steve Andrews reported on the MCP. The manufacturer is behind on the benches and tables. However, they should be shipped on Monday, August 10, 1998. The MCP will maintain the lot. C. Darrin Lahr updated the HRA on the Marketing Committee. The Committee will be meeting to select a firm to design and produce an Industrial Marketing Brochure. This brochure must be done by IDC Banquet on October 27, 1998. He stated that he was pleased with how the marketing plan is progressing. 18. Other Business. A. It was requested that the HRA meeting date be changed because of a conflict the mayor has on the first Wednesday of the month which makes it impossible for him to attend HRA meetings. 6 " . . . "- HRA Minutes - 8/5/98 Discussion was held on the subject of changing the HRA meeting date. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BOB MURRAY TO CHANGE THE HRA MEETING DATE FROM THE FIRST WEDNESDAY OF THE MONTH TO THE SECOND WEDNESDAY OF THE MONTH AT 7 P.M. Motion was carried unanimously. Ms. Koropchak will check to see if the By-Laws need to amended. The HRA will start this new schedule in October. B. Ms. Koropchak stated that Marquette Bank had requested the HRA enter into a Subordinate Agreement for TIF District 1-18.. A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY BOB MURRAY TO ENTER INTO THE SUBORDINATION AGREEMENT WITH MARQUETTE BANK SUBJECT TO APPROVAL FROM THE CITY A TTORNEY. Motion carried unanimously. C. Commissioner Bob Murray submitted a Declaration of Potential Conflict of Interest as an employee of Residential Development, Inc. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE ANDREWS TO ACCEPT THE DECLARATION OF POTENTIAL CONFLICT OF INTEREST FROM COMMISSIONER BOB MURRAY. Voting in favor: Darrin Lahr, Steve Andrews, Brad Barger. Abstaining: Bob Murray. Motion carried. 19. Adjournment. Meeting was adjourned at to:15 p.m. ~~~ Steve Andrews, Chair HRA --- 7