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EDA Minutes 02-10-2021MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, February loth, 2021— 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: Steve Johnson, Bill Tapper, Jon Morphew, Tracy Hinz, 011ie Koropchak-White, Lloyd Hilgart, and Jim Davidson Staff Present: Jim Thares, Angela Schumann, and Sarah Rathlisberger 1. Call to Order Steve Johnson called the Regular Meeting of the EDA to order at 6:01 p.m. 2. Roll Call 3. Annual Business Meeting a. Consideration to elect EDA Officers Bill Tapper nominated Steve Johnson for President of the EDA. Steve Johnson nominated Bill Tapper as Vice President of the EDA. Steve Johnson nominated Jon Morphew as Treasurer of the EDA. OLLIE KOROPCHAK-WHITE MOVED TO ELECT STEVE JOHNSON AS PRESIDENT, BILL TAPPER AS VICE PRESIDENT, AND JON MORPHEW AS TREASURER. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED, 7-0. b. Consideration to review EDA Bylaws Jim Thares noted that there were no recommended changes to the EDA Bylaws. Thares reported that there has been some initial discussion regarding EDA members possibly getting a stipend for meeting attendance. If this is eventually authorized by the City Council, changes to the EDA Bylaws may occur at a later date. c. Consideration to review EDA Enabling Resolution Jim Thares noted that there were no recommended changes to the EDA Enabling Resolution. d. Consideration of EDA Financial Statements and Fund Balance Information Sarah Rathlisberger provided an overview of the EDA financial statements and fund balance information as noted in the agenda. 011ie Koropchak-White asked about TIF District 1-39 Otter Creek Business Park. Economic Development Authority Minutes — February loth, 2021 Page 1 1 5 She noted that the district would be decertified this year and it appeared that there would be a negative balance on that TIF District. Rathlisberger indicated that it would be zeroed out as the City cannot report negative cash in a TIF District. Essentially, the EDA general fund would forgive the amount payable to that TIF District. Koropchak-White asked why the loan was estimated that way and if there was a difference between the projected and actual increment received. Thares mentioned he had noted the negative balance for this District in previous reviews of the TIF Management Plan. The combination of the value of the building, the cost of the site, and any development assistance provided to Suburban Manufacturing may have played a role in the increment coming in a little bit shy of the obligations. Thares stated that occasionally this can occur with TIF districts. Lloyd Hilgart asked how much cash is available for spending. Rathlisberger noted that it was dependent on the purpose. Unrestricted cash under the EDA general fund is $811,000. Further, what is available from the TIF Districts is restricted for the eligible purposes within the project area. Hilgart also asked which of the TIF Districts have unrestricted money. Rathlisberger noted that it depends on the type of the TIF District and the expense. It was noted that funds from TIF 1-20 and 1-22 could be used for property procurement in the downtown area. Koropchak-White asked if TIF funds were used in the downtown, as part of a redevelopment project, could a Housing TIF District be established. Thares noted it could occur, but a housing TIF District would require 20 percent of the units to be affordable to households at 50 percent of Wright County Area Median Income (AMI). A Redevelopment TIF District would offer the EDA more flexibility and fewer restrictions. Hilgart asked for a ballpark estimate of how much of the annual HRA property tax levy ($366,700 in 2021) is needed for general operating expenses. Rathlisberger estimated $123,000 would be available in the 2021 General Fund for redevelopment and general development activities; the rest is budgeted for specific line items such as salaries, legal fees, marketing, consultants, etc. Hilgart recalled that the EDA Fagade Improvement Program has encumbered $50,000 for one project on Broadway though the EDA's action was to allocate in total $250,000 to the pilot program with the general fund being the funding source. Hilgart asked if the additional $200,000 for the Fagade Improvement Program is still in the general fund. Rathlisberger confirmed. 4. Consideration of Additional Agenda Items None. 5. Consent Agenda Jim Thares requested removal of Item d. JON MORPHEW MOVED TO APPROVE THE CONSENT AGENDA WITH THE Economic Development Authority Minutes — February IOth 2021 Page 2 15 REMOVAL OF ITEM 5D. BILLTAPPER SECONDED THE MOTION. MOTION CARRIED, 7-0. a. Consideration of Approving Regular Meeting Minutes — January 13th, 2021 Recommendation: Approve Regular Meeting Minutes — January 13th, 2021. b. Consideration of Approving Payment of Bills Recommendation: Approve Payment of Bills through January, 2021. c. Consideration of Consent of Assignment and Assumption of Contract for Private Redevelopment and Tax Increment Financing (TIF) Revenue Note between Rivertown Residential Suites, LLC and GCRE — Rivertown, LLC Related to Property Transfer Recommendation: Approved the EDA's Consent to an Assignment and Assumption Agreement of the Contract for Private Redevelopment and TIF Revenue Note between Rivertown Residential Suites, LLC and GCRE — Rivertown, LLC related to a proposed sale transfer of the 47-unit apartment property. d. Consideration of Approving Entering into a Month -to -Month Lease Agreement with Alive! Lutheran Church (ALC) for EDA-Owned Property Located at 121 West Broadway ITEM WAS REMOVED FROM THE CONSENT AGENDA. Regular Agenda 5d. Consideration of Approving Entering into a Month -to -Month Lease Agreement with Alive! Lutheran Church (ALC) for EDA-Owned Property Located at 121 West Broadway Jim Thares explained that the lease was drafted by the EDA's attorney to be very simple for the tenant. Steve Johnson noted on a previous call to staff that some of the maintenance responsibilities of the tenant (when owned by Steve Johnson) were not clearly noted as being the ongoing responsibility of the tenant. Thares believes the Church expects no changes to the lease in essence as compared to past practice. The Church has already been paying for minor maintenance items. For larger system and equipment expenditures related to failure or replacement, the lease would need to state that the EDA has the sole right to terminate the lease with 30-day notice, and thus avoid significant repair and replacement costs. Thares would work with the EDA's attorney to add the maintenance responsibilities clarification language into the lease. Thares stated that he has talked with the tenant and they are okay with the proposed language additions as it was in place when the Johnson's owned the property. Lloyd Hilgart asked if Thares had talked to the church to see what their long-term plans. Thares noted that one of the trustees of the board recently asked staff about availability of buildings in the community. Economic Development Authority Minutes — February 1 Ot", 2021 Page 3 15 Jon Morphew asked if WSB was working with the tenant on relocation benefits. Morphew also noted that WSB should be providing the tenant with property referrals. Thares confirmed that Penny Rolf, WSB, is communicating with the Church leaders regarding relocation benefits and potential available property. Thares noted that in recent discussion with the church, they did not have any concrete timeline or schedule of moving. Thares further noted one additional lease adjustment, as suggested by Steve Johnson was changing the 30-day termination notice to 60-day termination. Hilgart asked what the rent was per month. Thares responded that it was $2,000 a month. Hilgart asked about the property taxes for that property. It was confirmed that the property taxes total about $6,000 per year; the rent received would cover that expense. Johnson commented that all the HVAC, electrical, and plumbing systems are functional in the building and the roof is in good shape. Hilgart asked if it is possible to forgo the rent in lieu of it stacking up and coming off of the relocation. Morphew felt that could be deducted from the relocation costs but would need to be verified. Hilgart asked if the EDA decided to forgo the rent would the property taxes still be charged. Sarah Rathlisberger said she would verify but noted that property taxes would still be due for 2021 (typical payments in May and October). She noted that property tax exemption must be filed with the County by June 30, 2021 for taxes payable in 2022. If the tenant was still in the building after June 30, 2021, the EDA would have to pay taxes in 2022. Hilgart asked if it was possible to project the amount the EDA would be required to pay for Alive! Lutheran Church's relocation. Morphew noted that will not be known with clarity until the tenant makes a claim. Hilgart asked if there was a cap on the expenses. Morphew reminded members that there are two pools of money: 1) reestablishment expenses, capped, up to a maximum $50,000 for items such as increased rent, code required improvements, and repairs/remodeling of new space, and 2) moving expense which is not capped. BILL TAPPER MOVED TO ADOPT RESOLUTION EDA-2021-01 APPROVING ENTERING INTO A MONTH -TO -MONTH LEASE AGREEMENT WITH ALIVE! LUTHERAN CHURCH FOR EDA-OWNED PROPERTY LOCATED AT 121 WEST BROADWAY WITH CHANGES AS NOTED BY STEVE JOHNSON AND JIM THARES. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 7-0. 6. Consideration of Adopting Proposed 2021 EDA Workplan Jim Thares provided an overview of the proposed 2021 EDA workplan. Thares noted that the workplan is essentially the implementation chart from the Monticello 2040 Vision + Plan. EDA members were asked to rank the implementation chart. Thares noted that business attraction and retention and downtown redevelopment were the key focuses by EDA members. Thares noted that the proposed workplan was ambitious and more than could reasonably be expected to be accomplished in one year. BILL TAPPER MOVED TO ADOPT THE 2021 EDA WORKPLAN AS PRESENTED. Economic Development Authority Minutes — February I01h 2021 Page 4 15 LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED, 7-0. 7. Economic Development Director's Report Jim Thares provided the Economic Development Director's Report as provided in the agenda packet. Bill Tapper noted concern with the total cost of maintaining the Broadway parking lot. Tapper noted that the budget increased approximately $3,000 from last year. Tapper was also surprised by the reserve fund and questioned what the existing balance was and what it was being used for. Lloyd Hilgart asked who the money was going to? Thares responded that Bullseye Properties, Big Lake, is the current property manager. Staff would review the Common Area Maintenance (CAM) agreement that was assigned to this property and provide follow-up information to the EDA at the next meeting. 8. Closed Session - Consideration of Recessing to Closed Session to Develop or Consider Offers or Counter -Offers for the Purchase or Sale of Real or Personal Property Pursuant to Minnesota Statute 13D.05, Subdivision 3(c)(3). Property Address and PID: 1. Address: 113 West Broadwav — PID: #155-010-052060 2. PID: #155-248-001010 3. PID: #155-248-001020 4. PID: #155-248-001030 9. Adjourn TRACY HINZ MOVED TO ADJOURN THE MEETING 8:19 P.M. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED, 7-0. Recorder: Jacob Thunander Approved: March IOth, 20 Attest: C: , Thares, Economic Development Director Economic Development Authority Minutes — February 101h, 2021 Page 5 1 5