HRA Minutes 06-04-2003
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AlJTHORITY
Wednesday, June 4, 2003 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners:
Chair Steve Andrews, Vice Chair Bill fair, Darrin LahI'. Dan Frie, and
Brad Barger.
Council Liaison:
Roger Carlson.
Staff:
Rick Wolfsteller, Ollie Koropehak, and Lori Kraemer.
GUESTS:
Chuck Van Heel, JAC Development and Mike Heimer
Barry Fluth, Master's Fifth A venue, Inc.
Fred Katter, Pineapple Management Company
I. Call to Order.
Chair Andrews called the meeting to order at 6:05 pm and declared a quorum.
2.
Consideration to approve the May 7. 2003 H RA minutes.
A MOTION WAS MADE BY DARRIN LAHR TO APPROVE TilE MINlJrES OF
TI-IE MA Y 7.2003 MEETING. DAN FRIE SECONDED Tl-IE MOTION. MOTION
CARRIED UNANIMOlJSL Y.
3.
Consideration of adding or removing items from the aQ.enda.
Koropchak asked the HRA if they would prefer to change the July 2'1(1 meeting to another
date due to. the 4th ofJuly holiday. It was the consensus to keep the meeting on July 2,
2003.
4. Consent Agenda.
A. Consideration to call for a public hearing date to extend the Compliance Date
within the Contract for Private Development between the HRA. Citv. and TCDC.
Recommendation: Call for a public hearing date of July 2, 2003, to consider
extending the Compliance Date within the Contract for Private Development
hetween the HRA, City, and TCDC, with all Authority costs associated with the
extension and puhlic hearing notice at the expense of the Developer.
B.
Consideration to amend the construction completion date within the Contract for
Private Development hetween the HRA. City. and Terrance & Mary Tomann
Family Limited Partnership.
Recommendation: Approve amending the construction completion date hom
July 1,2003, to September 1,2003, within the Contract for Private Development
between the HRA. City and Terrance & Mary Tomann Family Limited
Partnership.
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HRA Minutes - 06/04/03
A MOTION WAS MADE BY BILL FAIR TO APPROVE TilE CONSENT AGENDA
AS WRITTEN. DAN FlUE SECONDED TilE MOTION. MOTION CARRIED
UNANIMOUSLY.
5.
Continued - Consideration to approve the Second Amendment to Contract fix Private
Redevelopment between the HRA and JAC Dcvelopment LLC. the Assignment of
Contract fiJr Private Development between .lAC Development LtC and Production
Stamping. Inc.. and the Amcndment to the Loan Agreement between the HRA and the
City.
Ollie Koropchak,Exccutive Director, provided a brief summary regarding TIF Dist. 1-23,
stating initially this was pay as you go, hut later assigned and amended, and changed to
up-front assistance. The initial contract has been amended and assigned several times.
Koropchak also advised that Chuck Van Heel, representing JAC Devclopment LLC, had
agreed to and executed the terms and conditions previously negotiated, however Mr. Van
I-lee! had requested to address the liRA prior to any action taken. Koropchak introduced
Mr. Van Heel and Mike Heimer, real estate broker.
Chuck Van Heel addressed the HRA advising of questions that he had regarding 'fIF and
how it works. as well as what arc criteria for qualifying for TIF assistance. He further
stated that he feels the property has decreased in value. Van Heel also noted thcy have 13
acres on E. 7th Street which they were thinking of pulling of I the market and putting the
project on hold, due to conflicts on their part and an error which had cost them additional
money.
Koropchak clarified that the tax deficicncies were created hy propet1y tax refi.ml1s enacted
in 2001, which reduced the tax increment collected from commcrcial property throughout
Minnesota, further stating it is the same for all properties who receive TIF assistance.
She advised that this is done at the state level, not local. Koropchak clarified also that the
HRA would be collecting on the 1998 tax rate. Van I Ice! felt that the city would be ahle
to recover those monies at some point. He also stated that it had cost them $25,000 per
month to hold their building empty and were anxious to sell. Van Heel felt that they werc
competing with the city in regard to benefits of TIF versus bui Iding new.
There was discussion by the HRA that in 3 other cases of tax deficiency, the HRA had
held to their agreement. Koropchak advised that their policy has been to collect the
deficiency at the time of sale. Van Heel felt that the city is still collecting the taxes and
Bill Fair advised that they are collecting taxes on money that the city has already
expended. He also advised of the fact that this money then goes to the school district,
hospital district, etc., and not for city taxes.
Van Heel advised that the value of the building went down, however Rick Wolfsteller
didn't think TIF would have changed the value. They also discussed the difIerent
expenditures for TIF. Koropchak advised Van Heel that his!3 acrc parcel could qualify
as manufacturing and would not as redevelopment. She further explained the "hut fiJI'''
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IIR^ Millutcs - 06/04/03
concept as wcll. Fair fclt the HRA should not deviate from their policy.
A MOTION WAS MADE BY RILL FAIR TO APPROVE THE SECOND
AMENDMENT TO CONTRACT FOR PRIV ATE REDEVELOPMENT BETWEEN
TilE HRA AND .lAC DEVELOPMENT LLC. THE ASSIGNMENT OF CONTRACT
FOR PRIVATE DEVELOPMENT BETWEEN .lAC DEVELOPMENT LLC AND
PRODUCTION STAMPING, INe., AND TIlE AMENDMENT TO TilE LOAN
AGREEMENT BETWEEN THE CITY AND HRA. BRAD BARGER SECONDED
THE MOTION. MOTION CARRIED UNANIMOlJSL Y.
6.
Continued - Consideration to hear updates:
A. Phase I, II, and III design concept for a portion of Block 52.
Fred Katter was present and updated the HRA on their project, stating that they now have
negotiations with 2 seperate co-devclopers, both are viable, but they are not finished
putting a deal together and it may take another 2 to 3 weeks of negotiations. He added
that he has a strong prefcrcnce toward one. lIe stated one developer would bring in a
tenant immediately, the other may not, but has experience within the area. Katter assured
the liRA that they would have something together soon and be on target with their dates.
Lahr asked if there were any parking use differences with either of the developers and
Katter stated there were not and they are still looking at 3.5 to 4 cars per thousand square
feet for retail. lie also noted they have met with two of the key property owners, but
wants to wait until they have the co-developer on board. Katter thanked the HRA for
their patience.
R. Redevelopment of a portion of Rlock 51.
Koropchak advised that she had called all of the developers and invited them to the
meeting. She did not hear anything from Pat Sawatzke.
C. Redevelopment of Block 36. Phase II.
Barry Fluth was present and advised the liRA that they have a purchase agrcement with
one of the properties and are still working with the other two owners. I Ie stated things
are going well and it's just a matter of time. Koropchak advised that the H RA has to
expend the dollars, therefore hc has to incur the expenses so that the HRA can pay back
those eligible costs. Fluth didn't feel that would be a problem as it is for purchasing of
property and demolition. lie further stated they are still working on defining the product
for that site, which will be "fix sale" properties.
D. Redevelopment of a portion of Block 37 (request for 1'11" assistance).
Koropchak advised that she had left a message for Tom Holthaus but had not heard back.
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HRA Minutes - 06/04/03
7.
Consideration to approve issuance of the Certificate of Completion for Landmark
Square/Carriar;e House and to authorize payment of the Parking Improvement Costs.
Koropchak gave a brief summary of the request for payment and Barry Fluth advised that
he had additional documentation of the costs and provided this inf(Jrmation to the liRA.
He further advised that these costs were f(Jr the additional parking area behind the other 5
lots. lie advised of the original contract being amended to include 5 lots versus 3, and the
parking cost is for only the 5 lots.
Koropchak advised that by the redevelopmcnt contract, the dcveloper needs to gct the
certificate of completion before the payment of the up-front parking improvement costs.
She advised that the landscaping is pretty much complete, but there are some dccorative
items, repairs to parking elevations, and siding repairs that are not yet complete.
Therefore, the question is if the certificate of completion should be issued. She also
advised that the southerly side of the parking lot has a temporary curb which the city
allowed, assuming Fluth would proceed with Phase n. She further advised there is no
money in escrow to complete Phase II and that Building Official Fred Patch estimated the
cost to complete those items to be approx. $7,500. Fluth advised he has a bituminous
curb for now, and when Phase II moves forward they would remove it.
Koropchak the lIRA pay Fluth the money for the parking improvement costs, but to also
hold some money in escrow f()r Phase II. Bill fair suggested they authorize payment with
contingencies so that the project does not get held up. It was further stated that the
escrow could be returned when a contract is signed for Phase II. It was also noted that
there is some ponding in the parking lot occurring when there is a heavy rain, but that is
being corrected next week.
Decision 1:
A MOTION WAS MADE BY DARRIN LAHR TO APPROVE ISSUANCE OF THE
CERTIFICATE Of COMPLE'fION fOR LANDMARK SQUARE AND THE
CARRIAGE I-lOUSE, SUBJECT TO THE DEVELOPER PROVIDING $7,500 IN
ESCROW FOR PENDING FUTURE INSl"ALLATION OF PERMANENT
CURBING/GUTTER, AND COMPLETION OF THE FOLLOWING:
I. DECORA TIYE PIECES AND SIDING REPAIR TO THE CARR.lAGE HOUSE.
2. REPAIRS TO TilE P^ YEMENT ELEY ^ TIONS MATCHING GRADE.
DAN FRIE SECONDED THE MOTION. MOTION CARRIED UNANIMOlJSL Y.
Decision 2:
A MOTION WAS MADE BY RRAD BARGER '1'0 AUTHORIZE PAYMENT OF '1'1 IE
LAND ACQUISITION AND DEMOLITION COSTS AND PARKING
IMPROVEMENT COSTS IN THE AMOUNT Of Al' LEAST $57,000, AND UP TO
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HRA Minutes - 06/04/03
$75,000 SUBJECT TO THE ADDITIONAL EVIDENCE SUBMITTED BY BARRY
FLUTH AS DETERMINED BY BUILDING OfFICIAL FRED PATCH, AND
AGREED UPON, RECEIPT OF $7,500 IN ESCROW. DAN FRIE SECONDED THE
MOTION. MOTION CARRIED UNANIMOUSL Y.
8.
Consideration to authorize Dayment of I IRA bills.
A MOTION WAS MADE BY STEVE ANDREWS TO AUTHORIZE PAYMENT OF
THE HRA BILLS. DAN FRIE SECONDED THE MOTION. MOTION CARRIED
UNANIMOUSLY.
9. Consideration of Executive Director's Report.
Koropchak provided the report and also asked Dan Frie to update the} I RA on the May
20th meeting they had with ./cfTO'NeiIl and Dick Van Allcn. Frie advised that the group
discussed their interest in the city acquiring land for fiJture industrial development. lIe
stated that they had looked at approximately 400 acres off Orchard Road fiJr a future
industrial park which is the current Osowski land. They also advised of land referred to
as Paumen's near Silver Springs Golf Course. It was noted that the Osowski property had
trecs and ponds and would be a nice residential area; the Paumen land would be a good
spot for an industrial park.
10.
CommiUee Renorts. There were no reports.
II. Other Business. None.
12. Adiourn
A MOTION WAS MADE BY DAN FRIE TO ADJOURN TIlE MEETING AT 8:50
P.M. DARRIN LAHR SECONDED THE MOTION. MOTION CARRIED
UNANIMOlJSL Y.
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