HRA Minutes 07-02-2003
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, July 2, 2003 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners Present:
Chair Steve Andrews, Vice Chair Bill Fair, and Darrin Lahr.
Commissioners Absent:
Brad Barger and Dan Frie.
Council Liaison Absent:
Roger Carlson.
Staff Present: Ollie Koropehak.
Guest: Doug 1 larmon, Vice President and CFO, Twin City Die Castings
Pat Sawatzke, Keith Kjellberg, and Scott Douglas.
Steve Johnson and John Wittek, Crest Financial Group, LLC
1. Call to Order.
Chair Andrews called the liRA meeting to order at 6:05 p.m.
2.
Consideration to approve the June 4, 2003 HRA minutes.
DARRIN LAIIR MADE A MOTION TO APPROVE THE JUNE 4, 2003 HRA MINUTES.
SECONDED BY BILL FAIR AND WITH NO CORRECTIONS OR ADDITIONS, THE
MINUTES WERE APPROVED AS WRITTEN.
3.
Consideration of adding or removin~ items from the agenda.
None.
4. Consent Agenda.
None.
5.
Public Hearing - Consideration to approve extending the Compliance Date within the Contract
for Private Development bv and between the HRA. City, and Twin City Die Castings.
At the request of the Developer, TCDC; the commissioners called for a public hearing date to
consider extending the Compliance Date within the Contract for Private Development. The
hearing notice appeared in the local newspaper meeting statutory requirements. Per the Contract,
the Developer agreed to create 85 new full-time jobs within two years after the date of issuance
of the certificate of completion (the "Com pi iance Date"). Final certificate of occupancy was
issued by the Building Official on July 26,2001; therefore, the Compliance Date being July 26,
2003. Per the Contract, the Authority may after a public hearing, extend the Compliance date by
up to one year, providing that nothing in this section will be construed to limit the Authority's
legislative discretion regarding this maUer. Therefore, this item appeared on the agenda to
extend the Compliance Date from July 26, 2003, to July 26, 2004.
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HRA Minutes - 7/02/03
Doug Harmon, Vice President and CFO of Twin City Die Castings, Inade a presentation to the
commissioners. Mr. Harmon's presentation included how TCDC arrived at the projected 85 jobs
for creation and what they plan in the next year. Harmon reported per audit reports the sales
growth ofthe company in the] 990's increased by 8.4% between 1996-97, 9.4% between 1997-
98, and 5% in 1999; their facility in Minneapolis was stretched; and a magnesium study
projected growth. These three points lead to TCDC's decision to expand and the development of
a Phase I and Phase 11 Plan. Phase I - $1.6 million in land and building and $3.5 million in
equipment including 4 die cast machines. Phase 11 - a 17,500 sq ft building addition and an
additional four die cast machines. Through the use of magnesium assumptions and history, the
85 jobs were projected. Currently, the Monticello facility houses 5 die cast machines which
were manufactured in Europe and a number ofCNC machines. While on a North American Die
Cast Association trip to Switzerland, TCDC was introduced to the use of robotics in die casting
and this lead to a change in job creation of more technical jobs but less in numbers.
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The fixed assets at the Monticello facility include a $3.0 million building and land, an increase
from the original estimated $1.6 mill ion due to safety issues of a magnesium plant. Total assets
of building, land, and equipment - $8,513,790. Harmon noted that the average hourly wage of
the 34 Monticello employees including salary people is $21.72 for an average weekly payroll
using 40 hour/week is $29,539.20. So why hasn't TCDC created 85 jobs? Harmon indicated the
over-all economy and global competition particularly China has impacted job creation. He then
presented a list of prospective customers of which TCDC submiued quotes or bids. The five
magnesium prospects have estimated total sales of $4 mill ion and the alliin inum prospects have
estimated total sales of$15.6 million. IfTCDC was successful at landing one-half the estimated
sales, this could lead to an additional II permanent jobs or 60 jobs including temporary workers.
Harmon estimated the average hourly range of pay between $14 to $17 per hour including
tem porary workers.
Chair Andrews opened the public hearing for consideration to extend the Compliance Date
within the Contract for Private Development between the l-lRA, the City, and TCDC. With no
comments or questions from the public, the Chair closed the public hearing.
Koropchak informcd the comm issioners that the value of each job per TI F assistance is
$2,647.05. Initial amount ofTIF pay-as-you-go assistance pledged to TCDC was $225,000.
Other alternatives were presented by Koropchak for consideration if the developer were to
request amending the contract to alter the job and wage goals.
BILL FAIR MADE A MOTION TO ADOPT A RESOLUTION EXTENDING 'l"HE
COMPLIANCE DA TE WITHIN THE CONTRACT FOR PRIVATE DEVELOPMENT
BETWEEN THE liRA, CITY, ^ND TCDC FROM JULY 26, 2003, TO .JULY 26, 2004.
DARRIN LAHR SECONDED TIlE MOTION AND WITH NO FURTHER DISCUSSION, THE
MOTION PASSED UNANIMOUSLY.
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At this time, no request from TCDC to the HRA was made to amend the job and wage goals
within the Contract. Mr. Harmon was directed to work with Koropchak relative to potential
amendment of job and wage goals. Chair Andrews thanked Mr. Harmon for his presentation and
noted thc position of the HRA is to work with and to encourage industrial businesses like TCDC.
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HRA Minutes - 7/02/03
6.
Continued - Consideration to hear updates:
A. Phase I, II. and III design concept for a pOliion of Block 52.
Steve .Johnson reported plans continue to move along for redevelopmcnt of a portion of Block
52. Given the initial Financial Analysis did not include a market study and the interest by a
major tenant, a marketing study specific to this user has been prepared by Johnson's Team.
.Johnson then introduced .John Wittek, Crest Financial Group, LLC. Mr. Wittek informed the
HRA that his background was in banking, 25 plus years. Onee an identified site development,
another component is the financing. Financing is supported by a market study and in this case by
a major retailer. The prepared Marketing Study will be submitted to the major retailer on
Monday. Wittek said he toured Monticello with the Chamber Director and talked with O'Neill
about five potentia] sites within Monticello. The downtown site being preferred. The potential
retailer to utilize about 20,000 sq ft of the first-floor, is one of the top 25 national retail
companies (general merchandise) and is compatible with the downtown area. Decision time-line
is end of .July, middle of August. Given the concept for Phase I, II, and III as seen by the HRA,
has the concept changed asked Fair. Maybe Phase I and II. Traffic count of 3 1,000 cars per day
and projected 77 parking spaces are part ofthe project reported Wittek.
B. Redevelopment of a portion of Block 51.
Pat Sawatzke reported he spoke with the property owner to the north of his salon and at this tinle,
the owner is not prepared to move. Pat repolied his proposed project lies in two different 'I'll"
Districts; therefore, a new district would be created and the project is not affected by the five-
year activity rule deadline date.
c. Redevelopment of Block 36, Phase II.
No report, Brad .Johnson or Barry Fluth were not present.
D. Redevelopment of a portion of Block 37 (request for TlF assistance).
No repOlt. Koropchak reported she has not heard from Tom Holthaus after their first meeting.
Has left several messages.
7.
Consideration to authorize pavment of I IRA bills.
BILL FAIR MADE A MOTION TO AUTHORIZE PAYMENT OF TIlE HRA MONTHLY
BILLS. SECONDED BY DARRIN LAHR AND WITH NO FURTHER DISCUSSION, THE
MOTION PASSED UNANIMOUSLY.
8. Consideration of Executive Director's Report.
The commissioners accepted the Executive Director's Report as written.
9. Committee Reports.
None.
10. Other Business.
None.
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HRA Minutes - 7/02/03
II.
Adjournment.
BILL FAIR MADE A MOTION TO ADJOURN TilE HRA MEETING. SECONDED BY
DARRIN LAHR AND WITH NO FURTHER BUSINESS, THE MEETING ADJOURNED AT
7:30 P.M.
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HRA Chair
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