HRA Minutes 08-02-2006
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, August 2,2006 - 6:00 p.m.
Bridge Room - Community Center
Commissioners:
Chair Brad Barger, Dan Frie, Darrin Lahr, and Bill Fair
Commissioners Absent:
Steve Andrews
Council Liaison:
Wayne Mayer
Staff:
Ollie Koropchak, and Angela Schumann.
1. Call to Order.
Chairman Barger called the meeting to order, noting absence of Commissioner Andrews
and Rick Wolfsteller.
2.
Consideration to approve the June 7. 2006 HRA minutes.
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MOTION BY COMMISSIONER FAIR TO APPROVE THE MINUTES OF JUNE 7th,
2006.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0.
3. Consideration of adding or removing items from the agenda.
Koropchak noted that Michael VanHeel was present to discuss item 6A.
4. Consent Agenda.
A. Consideration to ratifY the Amendment to the Contract for Private Development
between the HRA and Master's Fifth Avenue, Inc.
Koropchak noted the changes made the Master's Fifth Avenue contract regarding
the project's commencement, completion and reimbursement date.
B.
Consideration to approve the Amendment to the Contract for Private
Development between the HRA and SL Real Estate Holdings LLC.
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Koropchak reported that Karlsburger would like to close on either the lOth or II th
of August and start grading on the 14th. The recommendation is to amend the
closing date from June 30'\ 2006 to August 15th, 2006.
MOTION BY COMMISSIONER FAIR TO RATIFY THE AMENDMENT TO
THE CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE HRA
AND MASTER'S FIFTH AVENUE, INC. AND TO APPROVE THE
AMENDMENT TO THE CONTRACT FOR PRIVATE REDEVELOPMENT
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HRA Minutes - 08/02/06
BETWEEN THE HRA AND SL REAL ESTATE HOLDINGS, LLC.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0.
5. Consideration to approve entering into a Preliminary Development Agreement with
Walker Instore, Inc.
Koropchak stated that in discussing the results of the last HRA meeting, Walker Instore
didn't understand why the HRA didn't proceed. Their representatives indicated that they
felt like the proposal had changed. Koropchak stated that she had informed Walker that it
was important to be here to discuss the project.
Koropchak stated that as the original proposal expired and their project parameters had
changed in terms of employment, the HRA may want to present a new offer. Walker
wants to buy 1 Y2 acre at $1 per square foot under their new parameters. Barger asked if
Walker is willing to work within the criteria. Koropchak stated that the original offer was
1 acre at the criteria rate, with the other Y2 acre at market rate. Walker is stating that they
are creating more jobs, so they may fit criteria for the other acreage, once they re-apply.
6.
Consideration to discuss follow-up items from HRA Workshop.
A. Block 53 - Korpochak noted that Michael Van Neel was present to discuss the
project that had been proposed for the block. The property owners had emailed
that they are not moving forward with the proposal at this time.
Barger indicated that the HRA had previously worked on Block 51 for some time.
Barger stated that perhaps by working together with the property owner, they
could accomplish something downtown. Barger stated that he felt it important to
have Van Heel discuss opportunities with the HRA.
Michael Van Heel addressed the HRA, noting that he had attended a seminar on
mixed-use project. Van Heel stated that mixed-use seems to work in the inner-
ring cities and suburbs. The question for his site is whether it works outside of
that environment. Based on the discussion that he had with the consultants they
were working with, no one could give them a clear answer. Van Heel stated that
as such, the risk outweighed the possible outcome.
Van Heel noted that Block 51 and 53 are great entrance points, but there was
concern about the housing and retail mix. When they had talked with retailers for
the mixed use project, all the interest was on the south Highway 25 corridor or at
the interchange location. Retailers want a prototype store in Monticello and
indicated that they wouldn't be willing to do the downtown concept here. In terms
of the office portion that had been proposed above the retail, the Workforce
Center had been the primary focus for that area. Van Heel stated that they wanted
to grow, but the 2nd floor space wasn't going to work for them.
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HRA Minutes - 08/02/06
Additionally, VanHeel stated that as they didn't have first-hand expertise in the
townhome and condo market, with the market slowing down, the concept
presented yet another risk. For the proposed project, they weren't convinced the
timing today was right.
Koropchak asked if Van Heel had further discussions with Muller. Van Heel
stated that they had not and weren't sure they had a lot of interest in the project.
Barger noted that without parking, the value of that property goes down.
Fair clarified that Van Heel owned the parking for the theater area, and that Van
Heel didn't own anything east of the theater. VanHeel confirmed. Barger asked
if they needed the whole block to do a project. Van Heel stated that to make a
project work comprehensively and get the parking, they really need the whole
block. Barger asked if they had looked at other areas or blocks. VanHeel stated
that he had not. He noted that if they were to have an anchor, that would help.
Koropchak asked if they were willing to partner with residential developers. Van
Heel stated that if and when they moved forward, they would absolutely partner
with a residential real estate partner to capture market.
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Fair stated that he thought Elk River's HRA was involved in the Jackson Place
project and that from a governmental point of view, the HRA can't go into a
project to generate revenue. He stated that the HRA may need to be willing to
spend some money up front to get a payoff. Barger asked if VanHeel sees
potential in downtown with the growth south of the interstate. Van Heel stated
that the momentum is at that location, from a retail perspective.
Lahr stated that in looking at risk and gap, the HRA's philosophy has been that it
wants developers to pick the projects. The HRA is supportive of the development
community. Where a gap exists, the HRA can perhaps reduce some ofthat risk.
Lahr stated that the HRA is interested in helping, but doesn't have the expertise to
take the project from the start.
Van Heel stated that until the Highway 25 and interchange commercial areas
mature, it may not make sense for retailers to compete downtown. Fair asked if it
makes sense to get government involvement at the beginning in perhaps acquiring
the land. Lahr stated that he thinks the amenities will sell the downtown -
community environment. The commissioners indicated that they had been
working on Block 51 and recognize that the City needs to make an investment.
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Van Heel asked if there are specific strategies for acquiring properties. Fair stated
that ifthe HRA approaches the owners, the price seems goes up. Lahr noted that
one issue in acquiring property is that there are too many parties involved. Fair
posed the question if it makes sense to acquire the property, demo the buildings
and have vacant land.
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HRA Minutes - 08/02/06
Barger asked Van Heel if the HRA owned the rest of the block, would they be
more willing to undertake a project. Van Heel stated that they would be more
willing to put money into marketing studies and look at residential opportunities.
Koropchak asked about the Van Heel's property along east 7th. Van Heel stated
that they are marketing the property.
Fair asked Van Heel about the closing of River Street at 25. Van Heel stated that
the key factors driving retail are access and parking.
The Commissioners thanked Van Heel for his input.
B. Other properties - Dan Frie.
Frie reported that there are 5 additional properties downtown that are for sale. Frie
noted that he had spoken with various property owners downtown, who had given
him various responses to selling.
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Fair stated that HRA needs to make a decision on how to proceed. Frie stated that
the asking price for the Muller Theatre property is $750,000; although there is a
difference between market value and their price. Fair suggested making an offer.
Mayer asked if the HRA would be opening up a "City will buy" mentality. Lahr
stated that with southward population flow, the picture has changed. The idea is
to now completely change downtown. Mayer asked about how to calculate fair
market value. Fair stated that the property owners probably think it is prices at
market. Mayer recommended that Frie develop a price.
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Fair recommended setting parameters so that approach to each property owner is
consistent. The Commissioners discussed possible purchasing parameters.
MOTION BY COMMISSIONER FAIR TO AUTHORIZE COMMISSIONER
FRIE TO ACT AS THE HRA'S PURCHASING REPRESENTATIVE ON
THREE PROSPECTIVE DOWNTOWN PARCELS, SUBJECT TO THE
PARAMETERS AS FOLLOWS.
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I. The HRA is interested in value of the land, not the building.
2. Start with 3 properties on Block 53 that are currently for sale
3. Offer will be based on market value ofland, plus incentive of 15%
4. The HRA is looking at long-terms holding ofland
5. The offer will include a provision that the current tenants/owners can stay for
minimum 00 years rent free (not including utilities)
6. The offer will expire and be re-evaluated at 2 months
MOTION SECONDED BY COMMISSIONER LARR. MOTION CARRIED, 4-
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HRA Minutes - 08/02/06
7.
Consideration to authorize payment of HRA bills.
MOTION BY COMMISSIONER LAHR TO AUTHORIZE PAYMENT OF THE HRA
BILLS.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0.
8. Consideration ofHRA Executive Report.
Koropchak referred to the report, stating that unless there were questions, the HRA could
move on to the next item.
9.
Committee Reports: Marketing - Koropchak reported that the group would be meeting
the following day.
Fiber Optics - Mayer reported that the preliminary survey
information has come back on the four possible models. Currently,
the consultants are reviewing the numbers for revenues in terms of
bond payoff. If the desired model works, it will be service to the
whole community with no home left behind.
10.
Next regular HRA meeting - Wednesday, September 6,2006.
II.
Adjournment.
MOTION BY COMMISSIONER BARGER TO ADJOURN.
MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 4-0.
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Chairinan ~
Recorder
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