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HRA Minutes 09-02-1998 . . , HRA Minutes - 9/02/98 MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, September 2,1998 w 6 p.m. Members Present: Chair Steve Andrews, Vice Chair, Bob Murray, Brad Barger, Dan Frie and Darrin Lahr. Council Liaison Present: Brian Stumpf. Consultant Present: Mark Ruff, Ehlers and Associates. Staff Present: Treasurer Rick Wolfsteller and Executive Director Ollie Koropchek. 1. Chair Steve Andrews called the meeting to order at 6 p.m. 2. Consideration to review the financial statement of the HRA lZeneral fund and TIF fund. Ollie Koropchek introduced Mark Ruff, Ehlers and Associates, who reviewed the financial status of the HRA. Mr. Ruffhanded out a Tax Increment Overview which covered the following points: I. Tax Increment District Boundaries versus Project Area. 2. Pre-1990 Districts versus Post 1990 Districts 3. LGAlHACA Penalties versus Local Contribution 4. District Summaries 5. Office of the State Auditor Mr. Ruff also handed a statement of current estimates and background of Tax Increment Districts recommending Polycast, Faymar and Standard Iron districts be prepaid to eliminate penalties. The HRA has five years to decide what to do with the properties. If nothing is done to the properties they are dropped from the TIF district. Within five years, financing must be set-up. Therefore, the HRA must do something other than buy up land. 1 HRA Minutes - 9/02/98 Mr. Ruff went on to explain the difference between pre -1990 and post 1990 districts. The restrictions are much greater for post 1990. The pre -1990 districts had loop holes on what you could and could not do. 3. Consideration to approve the January 7 and August 5 1998 HRA minutes A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DAN FRIE TO APPROVE THE MINUTES, AS WRITTEN, OF THE REGULAR HRA MEETINGS HELD JANUARY 7 AND AUGUST 5, 1998. Motion carried unanimously. 4. Consideration of adding agenda items. No additional items. 5. Consideration to adopt a resolution amendingthe bylaws of the HRA 011ie Koropchek stated that it was necessary to amend the bylaws of the HRA to change the meeting date from the first Wednesday of the month to the second Wednesday of the month. The HRA will need to pass a resolution to change the bylaws. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BOB MURRAY TO ADOPT A RESOLUTION AMENDING THE HRA BY-LAWS CHANGING THE REGULAR MEETING DATE OF THE HRA FROM THE FIRST WEDNESDAY OF THE MONTH TO THE SECOND WEDNESDAY OF THE MONTH. Motion carried unanimously. Chair Steve Andrews requested that future agendas contain consent items. Those being items that really don't need discussion. 011ie Koropchek stated she would check to see if the HRA would need to amend the bylaws to add consent items to their agenda. 6. Consideration to approve a resolution adopting the modified plan for Central Monticello Redevelopment Project No. 1; and establishing TIF District No 1-25 and adopting the plan relating thereto. 011ie Koropchek stated that the information was essentially the same as given on August 5, 1998. TIF District No. 1-25 is being created as an economic district with a life duration of 11 years for Blue Chip Development Company. N . . , HRA Minutes. 9102/98 Finding the project meets the local and state TIF policies for an economic district and increases the tax and employment base, A MOTION WAS MADE BY STEVE ANDREWS AND SECONDED BY DARRIN LAHR TO ADOPT A RESOLUTION ADOPTING THE MODIFIED PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1; AND ESTABLISHING TIF DISTRICT NO. 1- 25 AND ADOPTING THE PLAN RELATING THERETO. Voting in favor: Steve Andrews, Dan Frie, Darrin Lahr, Bob Murray. Abstaining: Brad Barger. Motion carried. 7. Consideration to approve the private redevelopment contract and the extended low- income housing commitment agreement between the HRA and St. Cloud Hospital Corporation. Ollie Koropchek reviewed the above item stating that the contract would be between the HRA and St. Cloud Hospital Corporation dba St. Benedict's Center. The HRA would agree to reimburse the redeveloper fOf site improvements and land write-down in a maximum amount of $440,000 subject to the redeveloper satisfying the terms and conditions of the contract. Attorney Bubul had asked that the HRA consider whether they might want to change the interest rate from 8% to 7.5% which would be consistent with other HRA contracts. St. Benedict's will qualify as a "Qualified Housing District". They has agreed to 40/60 test meaning that at least 40% or more of the residential units in the project are both rent restricted units and occupied by person(s) whose income is 60% or less of area median gross Income. Mr. Jim Hiatt, St. Benedict's, stated that he has no major concerns and hopes to commence work on November 1, 1998. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY BRAD BARGER TO APPROVE THE CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE HRA AND ST. CLOUD HOSPITAL CORPORATION AT AN INTEREST RATE OF 7.5% FOR REIMBURSEMENT OF PUBLIC REDEVELOPMENT COSTS. Motion carried unanimously. A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY STEVE ANDREWS TO APPROVE THE EXTENDED LOW-INCOME HOUSING COMMITMENT AGREEMENT BETWEEN THE HRA AND ST. CLOUD HOSPITAL CORPORATION. Motion carried unanimously. 3 . . , HRA Minutes - 9/02/98 8. Consideration to approve the private redevelopment contract between the HRA and Blue Chip Development Companv. Ollie Koropchek reviewed the above item with the HRA commissioners. The HRA would agree to reimburse the redeveloper for site improvements in a maximum amount of $32,000 subject to the redeveloper satisfying the terms and conditions of the contracts. The redeveloper agrees to submit copies ofthe lease agreement(s) for the 12,000 sq ft as the tenant is the beneficiary of the TIF assistance. The commissioners elected to make an up front local contribution of $8,000 for WAC/SAC fees. The facility must be leased for manufacturing or warehousing purposes. Ms. Koropchek also called the commissioners' attention to excerpts from the contract, specifically; Item 3.5 Job and Wage Covenants. It reads that at least 5 new jobs would be created with an hourly wage of at least $14.10 exclusive of benefits. A concern was voiced as to whether a wage of $14.1 0 per hr. could afford housing in Monticello. Dan Frie stated that it is possible to find housing in the City at that wage. Discussion was held on the wording "at least" vs. "average" $14.10 wage. A MOTION WAS MADE BY STEVE ANDREWS TO APPROVE THE CONTRACT FOR PRlV ATE REDEVELOPMENT BETWEEN THE HRA AND BLUE CHIP DEVELOPMENT COMPANY FOR REIMBURSEMENT OF SITE IMPROVEMENTS WITH TWO AMENDMENTS. IT SHOULD READ "AT LEAST $14.10 PERHR. EXCLUSIVE OF BENEFITS AND AT LEAST THREE NEW JOBS. THE MOTION DIED DUE TO THE LACK OF A SECOND. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BOB MURRAY TO APPROVE THE CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE HRA AND BLUE CHIP DEVELOPMENT COMPANY FOR REIMBURSEMENT OF SITE IMPROVEMENTS CONTINGENT UPON THE CONTRACT READING, "THE REDEVELOPER SHALL CAUSE TO BE CREATED ON THE REDEVELOPMENT PROPERTY BY THE INITIAL TENANT AT LEAST THREE NEW FULL TIME EOUIV ALENT JOBS WITH AN AVERAGE HOURL Y WAGE OF $14.10. EXCLUSIVE OF BENEFITS. Voting in favor: Darrin Lahr, Bob Murray, Dan Frie. Opposed, Steve Andrews. Abstaining, Brad Barger. Motion carried. 4 HRA Minutes - 9/02/98 9. Consideration to call for a public hearing for lease of the HRA property located at 3 Walnut Street. 011ie Koropchak stated that the HRA must hold a public hearing before it can lease out the property at 3 Walnut Street. She recommended that the HRA hold a special meeting prior to the regularly scheduled, October 14, HRA meeting. This would also enable the HRA to accept bids for demolition of the structure at 225 West River Street. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BOB MURRAY TO CALL FOR A PUBLIC HEARING FOR THE LEASING OF THE HRA PROPERTY LOCATED AT 3 WALNUT STREET ON SEPTEMBER 23, 1998, AT 5:30 P.M. Motion carried unanimously. 10. Consideration to accept a counter-offer for the property located at 225 Front Street (Rich and Marian Carlson). 011ie Koropchek discussed the counter-offer of Rick & Maria Carlson of July 24 which had a withdrawal date of August 10, 1998. Ms. Koropchek stated that she had not heard from the seller or the seller's attorney as of September 2, 1998. After reviewing the cash flow balance of the HRA and because the HRA has no special or immediate plans for this particular parcel and determining the counter-offer price unacceptable for property with a limited amount of buildable land. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BRAD BARGER NOT TO PROCEED WITH THE PURCHASE OF THE PROPERTY LOCATED AT 225 FRONT STREET. Motion carried unanimously. 011ie Koropchek will send Mr. & Mrs. Carlson a letter stating the HRA's decision. 11. Consideration to review the appraisal for the property located at 218 Front Street and authorization to proceed (O'Connor). Ms. Koropchek stated that the above item was a hold over from the August 5, 1998, meeting and reminded the HRA that the appraisal was confidential. Dan Frie stated that he had reviewed the appraisal and felt okay with it. He had felt that in the past some of the comparisons that were submitted were not of similar size homes. However, this one appeared to be comparable to others submitted. Mr. Frie also stated that there was only one other property in Monticello of equal value and he felt that if this one was put on the market that it would sell. Discussion was held on whether or not it could be purchased with a option. 5 . . . HRA Minutes - 9/02/98 A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRlN LAHR TO OFFER A THREE YEAR PURCHASE OPTION, AT A NON-REFUNDABLE ANNUAL FEE OF $1,000, FOR THE PROPERTY LOCATED AT 218 FRONT STREET. THE PURCHASE PRICE OF $81,000 TO INCREASE 4% ANNUALLY AT THE ANNIVERSARY DATE OF THE OPTION AGREEMENT. Motion carried unanimously. Ollie Koropchek will send the seller a letter regarding the HRA's decision. 12. Consideration of interest to purchase the property located at 313/317 West River Street (Snell). Ollie Koropchek stated that Mr. Snell, owner of the duplex at 313/317 West River Street, requested the HRA commissioners consider purchasing his property. Since the HRA's current redevelopment focus is not Block 55, A MOTION OF NO INTEREST TO PURCHASE THE PROPERTY AT 313/317 WEST RIVER STREET AT THIS TIME WAS MADE BY DAN FRIE AND SECONDED BY BRAD BARGER. Motion carried unanimously. Again, Ollie Koropchek will draft a letter to the property owner regarding the HRA's decision. 13. Consideration of a proposal for development of a community identity and marketing strategies and for HRA co-sponsorship. At the August meeting, the HRA tabled any action to co-sponsor funding the implementation of the proposal for development of a community identity and marketing strategy until reviewing the HRA financial statements. The MCP requested HRA participation in the amount of $9,250 (60%) of the $15,870 total project costs. Rita Ulrich, MCP, handed out a revised budget requesting $1500 from the HRA. She stated that the MCP has gone before the City Council and requested their participation in the amount of$9,250. Also, the Chamber of Commerce is interested but is not sure if they will be able to contribute at this time. Ms. Ulrich also stated that it would be helpful to have a letter of support for the grant application. When asked about the timing of this project, Rita stated that it will probably start this fall with community workshops going into winter. 6 . . , HRA Minutes - 9/02/98 Ms. Koropchek stated that Attorney Bubul had no problem with the HRA being the funding agent in a grant application to the Central Minnesota Initiative Fund. The HRA would receive and disburse the funds. Bob Murray stated that he felt that the timing of this project should coincide with the development of Walnut Street. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BRAD BARGER ENDORSING THE CONCEPT, AUTHORIZING SUBMITTAL OF A LETTER OF SUPPORT, AND NO COMMITMENT TO FINANCE AT THIS TIME. Motion carried unanimously. 14. Consideration to review the request for economic development funding of the proposed 1999 budget of the Citv Council. Ollie Koropchek reviewed with the commissioners the HRA budget which she submitted to the City Council. Treasurer Rick Wolfsteller reviewed the city budget with the HRA. He stated that money was tight and that he had to prioritize the budget. After much discussion, the commissioners felt that the first priority of the HRA should be the Industrial Reserve Fund in the amount of $75,000 with Marketing second in the amount of $35,000. It was felt that this should be conveyed to the City Council. 15. Consideration to review the first draft of the proposed TIF Guidelines. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE ANDREWS NOT TO DRAFT TIF GUIDELINES BUT TO CONTINUE THE USE OF THE EXISTING TIF POLICIES. Motion carried unanimously. 16. Consideration to authorize payment of monthly HRA bills. A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY STEVE ANDREWS TO AUTHORIZE PAYMENT OF THE MONTHLY HRA BILLS. Motion carried unanimously. 7 . . . HRA Minutes - 9/02/98 17. Consideration of executive director's report. Ollie Koropchek reviewed the items. A. Brad Johnson stated that Blackwoods liked the site on the river but was concerned about the noon lunch trade. B. The HRA will hold a special meeting on Wednesday, September 23, 1998, to accept demolition bids on 225 West River Street and hold a public hearing for the lease of 3 Walnut Street. C. Update on the Subordination Agreement requested by Marquette Bank. D. River Mills has submitted satisfactory evidence for completion and payment of work associated with correction of soils at the once gravel pit site. 18. Consideration of committee reports. A. Community Center - Bob Murray reported that things are on schedule. Burlington Northern approved removal of a spur. Groundbreaking should be November 2, 1998. The community center small group is working with Todd Swanson of Lifetime Fitness to try to bring his expertise into the fitness center at the new community center. Hopefully, both sides can work together. This should help diffuse some opposition. Ollie Koropchek will check to see if the HRA is scheduled for the sale of bonds on October 7, 1998. The new HRA schedule does not call to meet until October 14, 1998. B. MCP - Steve Andrews stated that the benches and picnic tables have been installed. Ollie stated that Skippers was to have moved their outside display by the end of August. She will follow-up to see that it is removed. c. Marketing - Darrin Lahr stated that Brad Barger was part of the interviewing team for the Marketing Brochure. Brad Barger stated that the interviewing team had hoped to hire a local company to prepare the brochure. However, the team felt that Lecy Design was extremely creative and had an extensive background. Ollie Koropchak stated that Lecy had been hired and submitted a work schedule. 8 . . . HRA Minutes - 9/02/98 19. Other Business None 20. Adiournment A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY BRAD BARGER TO ADJOURN THE MEETING AT 9:15 P.M. St~~s,~Ar 9