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HRA Minutes 07-05-2000 , I . HRA Minutes - 07/05/00 MINlrn:s MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, July 5, 2000 - 7:00 p.m. City Hall - 50S Walnut Street - Bridge Room Members Present: Chair Darrin Lahr, Vice Chair Dan Frie, Steve Andrews, Bob Murray and Council Liaison Brian Stumpf. Members Absent: Brad Barger Oilicers Present: Executivc Director Ollie Koropchak and Recorder I,ori Kraemer. Guests: Larry Olson, Metro Plains 1. Call to Order. Darrin Lahr called the meeting to order at 7 PM. 2. Consideration to approve the HRA minutes of June 7. 2000. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DARRIN LAIIR TO APPROVE THE MINUTES OF THE HRA MEETING OF JUNE 7, 2000. Motion carried. 3. Consideration of adding agenda items. None 4. Consent Agenda. None 5. Consideration of items removed from the consent agenda for discussion. None 6. Consideration to hear a conceptual plan for redevelopment of the Amoco Wcst Broadway /rlus site and a motion authorizing an exclusive 60-day right to work with Brad Johnson/Barry Fluth. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY S'J'EVE ANDREWS TO TABLE nIlS ITEM AS MR. JOHNSON WAS UNABLE TO GET PLANS TOGETHER FOR THIS PROJECT IN TIME FOR TIlE JULY MEETING. TIllS ITEM WILL BE HEARD AT THE AUGUST 2, 2000 HRA MEETING. Motion carried. -1- , I . HRA Minutes - 07/05/00 7. Consideration to hear renewed interest for redevclopment of the Klucas property as alli:.miable housing and a motion of interest for use of TI F. Ollie Koropchak. Director of Economie Development, brictly reviewed with the commissioncrs the renewed intercst for the redevelopmcnt of the Klucas property. In December 1998, Brad Larson appcared before the HRA and rcquested TIF assistanee to enhance a tax credit application through the Minnesota I lousing Finance Agency. Thc request for nF assistance was not to exceed $10,000 for demolition and removal of existing mobile homcs and site improvements, and a semi-annual real estate tax "rebate" of 5 (YYo of project taxes paid for a period of five ycars which would be used to "buy down" the rents to the tenants. On January 6, 1999, thc liRA approved TIF assistance for this redevelopment with said recommcndation to the City Council. On January 11, 1999, the City Council authorized a letter of acknowledgment for this TIF assistance. This letter accompanied the tax credit application. At the June 1999 lIRA mceting, the commissioners wcrc informed the nF requcst was dropped as Brad Larson informed Koropchak the project was not awarded tax-credit funding for reason of sitc location - too far from core downtown area. The HRA had received a copy of the Affordable Housing Study as preparcd for Brad Larson. Mr. Larry Olson, Metro Plains, working with Brad Larson, contacted the office of the HRA and exprcsscd renewed interest for rcdcvelopment of the site, because thc tax credit application is awardcd based on a point system and thc criteria for the point system has changcd, and requested a motion of interest for use ofTIF. When Olson contacted Koropehak, he explained the ncw criteria includes extra points if thc project has other non-profit dollars invested in thc projcct. Koropchak suggested soliciting other non-profit dollars rather than requesting additional dollars from the public sector. Mr. Larry Olson, Metro Plains, and Carol Stciss, Garsten Properties, provided a presentation bricfly describing what their companies do, noting that they primarily work with senior relatcd housing properties. Ms. Stciss stated they are a property managcment company. Mctro Plains operates in 6 statcs, has been in business for 20 years and dcal with government assisted housing and rcstoration. Olson provided a slide prescntation of housing projects they have completcd using government assistance. He stated that thcy were interestcd in 5 years of tax incremcnt and $10,000 for clean up project regarding this property. They are asking to changc some of the wording in a previous lcttcr written by the City Council and Olson also wanted to explain the "point systcm" involvcd in getting govcrnment assistance and how the City could be of benefit to them. Mr. Olson stated that there was no final date listed on the previous lctter from the City Council and he requested that the City re-issue a letter prior to 7/20/00. lIe also stated there was a pOl1ion of thc letter he would like changed rcgarding TlF assistanee. Another -2- . lIRA Minutes - 07/05/00 item that needs to be in writing is a letter of working agreement regarding Section 8 vouchers which would give them approximately 10% of the points needed to be successful. The commissioners asked what type of housing was being proposed and they briefly described they would be 3+ bedrooms up, washer/dryer up, full bath up and half bath on lower level with a single car garage. There would be 2 handicapped units per "cluster". The units would not be back-to-back and would all have their own front/back areas, 60 total units in 2 phases. An issue discussed by the commissioners was that of single car garages. Ms. Steiss noted that it has been their findings that this is suitable with additional parking space on the side. She also notcd they have restrictive covenants that would be in place. Mr. Olson stated also that this would be a limited dividend partnership which the State would regulate. I Mr. Olson noted that if the City was interested in contributing more to this project, i.e. forgiving something such as assessments, SAC/WAC charges, or perhaps lower the building permit fees, that this would put them closer to 100% in regard to their chances of getting their grant. The commissioncrs discussed a concern with giving additional funding and how it would affect the HRA budget. They stated they were not prepared to offer more than the original TIF, especially at this late notice. Koropchak suggested Mr. Olson be present at the City Council meeting 01'7/12/00. A MOTION WAS MADE BY ROB MLJRRA Y AND SECONDED BY DAN FRIE TO APPROVE THE USE OF TIF ASSISTANCE IN THE AMOUNT AND TERMS AS PREVIOUSL Y DETERMINED FOR THE ABOVE PROJECT WITH A RECOMMENDATION TO FORWARD THE REQUEST TO THE CITY COUNCII_ APPROVING A LETTER, WITH CIIANGES AS NOTED ABOVE, OF ACKNOWLEDGMENT FOR USE OF TIF. Motion carricd 3 to 1 with Steve Andrews voting in opposition. 8. Consideration to hear progress relative to research ofpurpose/obiective and funding for a scattered housing program and a motion of action/direction if so necessary. Koropchak gave a brief summary of the information received. At a joint meeting held in May between the Council, HRA, and local lenders, staff was encouraged to pursue development of a scattered housing program for the City of Monticello. At the June HRA meeting, any formal action was tabled, and Dan Frie and Jeff O'Neill were directed to research the purpose/objective and funding for a scattered housing program. . Dan Frie discussed a prior meeting with Jeff O'Neill, Deputy City Administrator; Don Welker, Preferred Bank of Big Lake; and Koropchak on June 27 to discuss potential -3- , I . H RA Minutes - 07/05/00 funding programs through the Minnesota Housing Finance Agency, Greater Minnesota I lousing Fund, and DTED. Program concepts were discussed and it was agreed that scattered housing program goals/objectives the lIRA/City want to accomplish need to be developed and a list of 50 homes targeted at EMV of less than $90,000, by age (year built), and rental/owner occupied. A second Ineeting was scheduled for July 5, 3:00 p.m. with Cheryl of MIIFA. Jeff/Ollie received copies of the program concepts. Frie and O'Neill felt the program should be targeted for demo and reconstruct. The commissioners discussed targeting houses with EMV's of under $65,000. They also discussed ways to notify owners of these properties and it was suggested to send letters to these owners stating the City's interest in purchasing at market rate. Frie noted that each grant program has dif1erent criteria and this is something he and O'Neill would look into. 'fhe purpose is to provide something new and affordable where these existing properties are located. They will get more specifics at a later date. They noted that the purpose of this meeting is to direct to proceed. 9. Consideration to discuss amending the wage reLluirement within the Business Subsidy Criteria of the HRA and a motion requesting the City Council call for a public hearinQ. Koropehak advised the commissioners that upon receiving a notice relative to the increase of wage thresholds by DTED for it's Minnesota Investment Fund and upon discussion with the liRA Chair, this item appears on the agenda for discussion and consideration to amend the I IRA Business Subsidy Criteria relative to wages. Currently, Section 4:06 reads: Recipients of any business subsidy will be required to meet wage and job goals determined by the liRA on a case-by-case basis. Due to recently- enacted changes to the Business Subsidy Act, the case-by-case language may not be sufficient and we may need to amend this language to establish specific goals. Attorney Bubul is reviewing our criteria to see if the recently-enacted changes apply to the HRA, EDA, or City's Business Subsidy Criteria. We have until May 1,2003 to make those changes. Section 5:03 C reads: For manufacturing and warehousing business subsidy request, at least 90% of the jobs created must pay a wage of at least 160% of the federal minimum wage requirement for individuals over the age of20. (The minimum federal wage is $5.15 therefore 160% is $8.24 per hour). Regardless of the new changes, the HRA commissioners should begin discussing interest to increase the wage threshold for use of TIF. lIRA previous rational was to allow flexibility and to determine on a case-by-case basis. In addition to the State's increase, the wage threshold for funding through the Wright County Economic Development Partnership is at least $10 per hour. The process to amend the Business Subsidy Criteria is: 'The HRA determines a wage threshold and recommends the change to the City Council requesting the Council call for -4- . I . HR^ Minutes - 07/05/00 a public hearing to amend the criteria. Darrin Lahr felt the HRA should be at the same level as others, at least at the minimum which we are below that at this time. A MOTION WAS MADE BY STEVI': ANDREWS AND SECONDED BY BOB MURRAY TO DISCUSS AND TABLE ANY RECOMMENDATION UNTIL THE AUGUST HRA MEETING, ALLOWING TIME TO RESEARCH THE NEED FOR (HilER AMENDMENTS. Motion carried. 10. Consideration to authorize payment of the monthly HRA bills. 11. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY STEVE ANDREWS ero APPROVE 'rHE MONTHLY HRA BILLS. Motion carried. Consideration of Executive Director's ReDOli. a) Mayor's Bus Tour & Golf Outing ~ This was held on June 14. Approximately 90 invitations were maj led. erhe most interest ofthe bus tour was the potential of the city owning industrial land. The repeated question surfaced again: The probability of an interchange at County 39 Wand 1-94. b) The Community ProJile update was completed and all businesses providing info were mailed a thank you and a copy of the profile. Additionally and since, a spread sheet identifying the wage and job levels was compiled. c) TIF & GMEF Assistance Analysis - This spend sheet identifies the TIF and UMEF assistance given in net present value and using the CPI innation factor. The benefit is the combined annual wages without benefits plus the annual property taxes. d) Other updates - Housing permit values and good existing home sales, comparative Monticello/Elk River gross retail sales, and traHic counts. e) Skipper's Pool- Wolfe signed lease on 7/5/00, fee 01'$610.87 paid, and certificate of insurance received. 1) Projected TIf 1-22 Revenues - With the Quick TIF 2000 having arrived it is time to begin the 1999 reports for the State Department of Revenue. At the request of the HRA Chair, projected TIf revenues for the District 1-22 will be ran to aid the HRA with future redevelopment planning. g) Prospects - Machine Shop - 25,000-30,000 sq 11. precast bldg. 5-6 acres, current 40 jobs, 6-10 additional jobs within 2 years, average wage $15.02 w/o benefits, project 2001, relocation and expansion, request for TIF. Koropchak attached cashflows. HRA members agreed with an otTer of $175,000 to $210,000 for land write down if qualifying for "but for" test. Machine tool shop - 4,000 sq ft , 5 new jobs in 2 years. Relocation from home business. Meeting scheduled for afternoon ofJuly 5 was rescheduled to July 12. Production of packaging materials - 50,000 sq ft building, 2001-2002 construction. Production of windows - 100,000 sq ft building - not interested, will -5- , I . HRA Minutes - 07/05/00 h) i) remain in (i-olden Valley or St. Louis Parle Fortune 500 - I ,ooking fi)f 10 acres, 100,000 sq ft office complex, not headquarters for CEOs. Needs: Freeway access, profession business park, three story building, parking stalls for 500 cars. Looking at three cities. TIF, incentives? Monti sites of interest: City/Chadwick, River View, Pfeffer commercial. 70,000 sq ft building - 25 acres. 30 employees. Distribution of machinery and parts. Requires out door storage. from Towle Real Estate. Needs conditional use approval. Monticello Market Place Manufacturer of wood chips and mulches - 20 acres, 5,000 sq ft shop, 5-10 out- door-storage, some noise. Potential 5,000 oHice headquarter. 25 manufacturing jobs, $15-16, oHice wages average $45,000. Needs conditional use approval. HRA Bylaws - Copy of Amended Bylaws provided. TCDC - Closed and disbursed EDA dollars of $1 00,000. Closed and disburscd State/City dollars totaling $469,000 of the $500,000 to date. Still anticipate completion of the building by the end of September. 12. Consideration of committee reports: a) City Council - Brian Stump - Nothing new to report. b) Mep - Steve Andrews - Nothing new to report. c) Marketing - Barger/Lahr - IIave not met. 13. Other Business. None. 14. Adjournment. Ncxt liRA meeting, August 2, 2000. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY STEVE ANDREWS TO ADJOURN THE MEETING AT 8:30 PM. Motion carried. ~~~- -6-