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HRA Minutes 07-14-1999 . . . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, .July 14, 1999 - 7:00 p.m. City Hall Members Present: Chair Bob Murray, Vice Chair Darrin Lahr and Dan Frie. Absent: Members Brad Barger, Steve Andrews and Council Liaison Brian Stumpf. Staff Present: Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak and Recording Secretary Lori Kraemer. 1. Call to Order. Chair Bob Murray called the HRA meeting to order at 7:00 p.m. 2. Consideration to approve the June 9. 1999 HRA minutes. A MOTION WAS MADE BY DANFRIE AND SECONDED BY DARRIN LABR TO APPROVE THE MINUTES, AS WRITTEN, OF THE HRA MEETING OF JUNE 9, 1999. Motion carried unanimously. 3. Consideration of adding agenda items. Steve Krenz of Midwest Graphics requested to present a proposal to the HRA members regarding an expansion of their business. This item was added to 6A. Ollie Koropchak requested to advise the HRA members of an industry that has contacted her regarding possible TIF assistance. This was placed under Other Business. 4. Consent Agenda. a) Consideration of the revised BRA Fund Summary for year ended 12/31/98. Ollie Koropchak advised that this item requires no action by the HRA and that it is for informational purposes only as it is helpful in showing cash surplus for budgeting. Rick W olfsteller pointed out some changes that were made and that this was all summarized for the HRA members to read more clearly. It was also stated that these numbers were as of 12/31/98 and that they do not project cash flow. -1- . . . HRA minutes - 7/6/99 5. Consideration of items removed from the consent agenda for discussion. None 6A. Consideration of a proposal by Steve Krenz of Midwest Graphics to assist in their possible expansion at their Monticello site. Steve Krenz presented a proposal to the I-IRA members requesting financial assistance for a possiblc expansion of their business in Monticello. He added that Phase I of their business plan is making good progress. The building was occupied on 2/12/99 with 19 jobs created as of 3/26/99. Midwest Graphics would like to explore the possibility of moving a piece of their business from Plymouth to Monticello and have a target datc of 9/1/99. This expansion would add up to 40 new jobs at a pay rate of$21.58/hr plus benefits, allowing primary employment to stay in Monticello as well as fill up their building now rather than a 5 year plan. Midwest Graphics would still fulfill Phase I ofthe project by adding additional employees at the average hourly pay of $8.32 plus benefits, this proposal accelerates their plan. The rcquest for financial assistance would be for their moving expenses, equipment purchases, as well as improvements made to the building. The estimated costs at this time are over $400,000, but their request for assistance is for approximately half of this estimate ($200,000 to $250,000) to make this move. Midwest Graphics would like to know if there are any options for this assistance, stating their options are to leave the building as is, move to the Monticello site, look at another city or move into the Egan plant. Their first choice would be to expand in Monticello, the guarantee of oilering primary employment in Monticello makes it a worthy goal. Ollie Koropchak stated she needed to check into the EDA loan program and see if this would be an eligible expenditure. It was also stated there may be a way of speeding up the Developers Agreement for fast cash. Due to Midwest Graphics time line, Ollie stated she would check into these options as soon as possible and be in contact with Steve Krenz. 6. Consideration of City Cowlcil recommendation to authorize preparation and solicitation of a request for proposal for an over-all City Housing Study. Ollie Koropchak presented the staff report stating that at the June meeting, HRA members heard a presentation from Harold Jesh who asked the commissioners as to their level of interest for use of TIF assistance for a market rate rental complex. The request was for a Housing District at a 20/50 criteria and 15 years of increment. The HRA -2- . . . HRA minutes - 7/6/99 commissioners deferred these questions to the Council. At the June 28 Council meeting, Council members agreed with staff recommendation and directed the HRA to conduct a Housing Study to better understand the hOllsing needs of the City of Monticello for TIF and City Planning. Koropchak received a reference list of companies who conduct Housing Studies and stated that samples of these studies were being mailed. She believed the approximate cost for a study is $15,000. Ollie stated that this can be a useful tool for City Planning and for use of TIF or development of a Scattered Housing Program. The members had several concerns about how a company gets its information. It was stated that the City would direct the company as to what specific information they are looking for. It was also suggested that the BRA contact other communities in this area to see if they have had a similar study done and possibly get a copy of this study. A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRIN LAHR AUTHORIZING PREPARATION AND SOLICITATION OF A REQUEST FOR PROPOSAL FOR AN OVER-ALL CITY HOUSING STUDY. Motion carried unanimously. 7. Consideration to authorize reconveyance of Outlot A, Country Club Manor. to the State of Minnesota and reapply for conveyance. Rick Wolfsteller presented the staff report explaining the need to meet Minnesota State Statute regarding tax-forfeited property being put to public use in five years or the property is reconveyed back to the State. Five to six years ago the City acquired this 14 to 16 acre parcel along the freeway for back taxes of more than $400,000. County tumed this property over to the City which paid $4,000 to $5,000 in real estate taxes in addition to assuming assessment debt. This was first one the City had acquired. The City received a deed with a restriction to put it into the HRA's name to turn over for residential (R-3) property. This type of deed from the Dept. of Revenue had a clause that if this was not done within 5 years it would go back to the State. Mr. Wolfsteller explained the best way to put it back into the City's name according to Wright County would be to reconvey it back to the State and the State would then send back the correct deed. The Dept. of Revenue has spoken to Wright County officials who have stated it really should not be a problem. Mr. W o lfsteller also stated he would like a stipulation from the HRA stating if the property does not come back to the City, the State will get the $500,000 debt back which was already paid by the City. -3- . . . HRA minutes - 7/6/99 A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRIN LAHR AUTI rORIZING RECONVEYANCE OF OUTLOT A, COUNTY CLUB MANOR, TO THE STATE OF MINNESOTA AND REAPPLY FOR CONVEYANCE. Motion carried unanimously. 8. Consideration of level of inter cst for use ofTIF to assist a manufacturinlZ company. Ollie Koropchak presented the staff report noting that Twin City Die Castings made a commitment to the City of Monticello, subject to follow through by the City. The company has requested 6 acres of freeway exposure land and Mr. Charlie Pfeffer, Pfeffer Company, Inc., informed the group that this land was "not on the market". Ollie spoke to Mr. Jay Ehlers after that meeting and questioned whether or not having freeway exposure would make or break the deal and it was stated that freeway exposure was very important to them. Ollie stated that on July 15, Charlie Pfeffer and the property owner of the land in question will be at the IDe meeting to discuss this issue. The question was asked of the HRA members as to what they are willing to do for this project. If the HRA is interested in providing TIF assistance; at what level of assistance. The company may apply for Federal money which comes to the City as a grant. The City would loan the money out to the company and retain all or a portion of the principle and interest. The maximum increment is $201,000, although Koropchak suggests an additional 1 0% which comes out to be about $225,000. The members were interested in providing TIF assistance and it was the consensus of the members to maximize the amount of tax increment generated for land write-down and site improvements for $225,000. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY DAN FRIE TO DIRECT THE CITY COUNCIL TO CALL FORA PUBLIC HEARING, SUBJECT TO THE FACT OF WHETHER THIS IS A NECESSITY. Motion carried unanimously. 9. Consideration to approve amending the Private Redevelopment Contract between the HRA and RDI subiect to release of any claims against the HRA. Ollie Koropchak stated that Mr. Rick Murray of RDI did respond to her request regarding the contract between the HRA and RDI and he will issue a letter releasing the HRA of any claims against them for taxes payable in 1998. Koropchak previously suggested the HRA wait to consider amending the contract until the tax increment for the first half of payable 1999 was received. -4- . . . HRA III inutes - 7/6/99 A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRIN LAHR TO APPROVE AMENDING THE PRIVATE REDEVELOPMENT CONTRACT BETWEEN THE I IRA AND RDI AS SO WRITTEN: AMEND ARTICLE III SOUj CORRECTIONS, SECTION 3.3 FINANCING OF SOIL CORRECTIONS, (D) TO READ:.... THE AUTHORITY SHALL PA Y TO THE REDEVELOPER 100 PERCENT OF THE A V AILABLE TAX INCREMENT APPLICABLE TO EACH PAYMENT DATE; PROVIDED THAT THE AGGREGATE SUM OF ALL PAYMENTS UNDER PARAGRAPHS (C) AND (D) OF THIS SECTION SHALL NOT EXCEED $81,600, AND SUBJECT TO RELEASE OF ANY CLAIMS AGAINST THE HRA. Motion carried with Bob Murray abstaining. 10. Consideration ofrcquest from HRA to City Council for Budget Process - Year 2000. Ollie Koropchak presented the staff report listing future objectives to consider for the budget process for the year 2000. After discussion, it was the consensus of the HRA members to support and request funding for purchase of Industrial Land. Koropchak stated the HRA currently has $150,000 in reserve and the City an additional $150,000. The HRA cannot purchase land outside the City limits. By consensus, the HRA commissioners prioritized and agreed to request the following for Budget year 2000: 1. In support of the resolution for acquisition of industrial land, request $75,000 for purchase of industrial land. 2. To implement the redevelopment of the North Anchor, support the North Anchor Committee's request for an annual appropriation 01'$200,000. 3. Request $20,000 for a City Housing Study. 4. Suggest the City appropriate $100,000 as a line-item in the City's General Fund for Public Utilities (trunk fees or water/sewer hook-up) for Local TIF Contri buti on. 5. Deferred a request for dollars for the Scattered Housing Program. 6. Deferred for one-year a request for marketing dollars. 7. Elected not to exercise the HRA power to levy in year 2000. -5- . . . 15. HRA minutes - 7/6/99 II. Consideration to authorize payment of monthly HRA bills. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY DAN FRIE TO AUTHORIZE PA YMENT OF MONTHLY BRA BILLS. Motion carried unanimously. 12. Consideration of Executive Director's report. Ollie Koropchak presented the report noting that the HRA received the remaining $100 for rent from Tammy Hacker. Paul Warn, Apartment Manager for this property thanked the City for getting this property cleaned up. She also noted that the MCP will be starting interviews for the new director in the next 1 to 2 days. 13. Consideration of Committee reports: Bob Murray gave an update on the community center stating they have received a draft copy of the policy manual and that everything is going according to schedule. Dan Frie gave an update on North Anchor stating they will not be meeting any more unless there is a need. Ollie Koropchak asked for a suggested date to send out notices for a Public Informational Meeting regarding the North Anchor area presented by the North Anchor members. 14. Other Business. Ollie Koropchak wanted to update the HRA members on a company asking for TIF assistance. This is a company with approximately 200 employees looking for 20,000 sq. ft. to 23,000 sq it. It is not a manufacturing company. They are looking for approximately 6 to 8 acres of land needed for outdoor storage. Koropchak advised that she sent information to this company via mail. The members had no comments based on lack of information regarding TIF assistance and stated this did not seem to be a good use of/and putting this on 350,000 sq. ft. of/and. Adiournment. A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRIN LAHR TO ADJOURN THE MEETING AT 9:00 P.M. Motion carried unanimously. ~~ t ~1,.. ;/ka.YJylfJu Chair, Bob Murray l~ing ~etary, Lon Kraemer -6.