HRA Minutes 11-05-2003
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, November 5, 2003 - 6:00 p.m.
505 Walnut Street - Bridge Room
Comm issioners Present:
Chair Steve Andrews, Vice Chair Bill Fair, Darrin Lahr, and Dan Frie.
Commissioner Absent: Brad Barger
Council Liaison Present:
Roger Carlson.
Staff Present: Rick Wolfsteller and Ollie Koropehak.
Guest: Steve Johnson, Block 52
I. Call to Order.
Chair Steve Andrews called the HRA meeting to order at 6:05 p.m.
2.
Consideration to approve the October I, 2003 HRA minutes.
BILL FAIR MADE A MOTION TO APPROVE THE OCTOBER 1,2003 HR^ MINUTES.
SECONDED BY DAN FRIE AND WITH NO CORRECTIONS OR ADDITIONS, THE
MINUTES WERE APPROVED AS WRITTEN. VOTE 4-0. BARGER ABSENT.
3.
Consideration of adding or removing items from the agenda.
Item No.4 was removed from the agenda, as Barry Fluth and Brad Johnson informed the liRA
Office they would not attend. With Fluth in Arizona through December; Kennedy & Graven,
Fluth and Koropchak will converse via a conference call to begin preparation of the draft copy of
the Contract for Private Redevelopment for Landmark Square Phase II.
4. Consent Agenda.
None.
5. Consideration to review revised uses/sources statement after receiving bids and TIF assistance
for redevelopment of Landmark Square Phase II.
Removed.
6.
Continued - Consideration to hear updates:
A. Redevelopment of a portion of Block 52.
Steve Johnson, property owner of Block 52, updated the HRA stating he and Bill Gorton,
McComb Group, lllet with Ehlers & Associates today and it appears there arc available dollars.
The proposed lay-out of Option A, HRA's preference of September, with zero lot-line setbacks is
not economically feasible. The alternative is a national retailer, Walgreens, looking to construct
a 14,300 sq ft building located more or less in the center of the most southerly part of Block 52.
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HRA Minutes - 11/05/03
The Walgreens' people have been in downtown and a preliminary approval letter is in place
based on thc following: 1. Mccting with staff indicated Option B. (submitted sketch) is in non-
compliance of the Comp Plan. 2. Planning C0I11l11ission called for Public Hearing of December
2 fix consideration to amend the Comp Plan. 3. Walgreens' likes the downtown site, only site,
because Monticello in growing area of MN. 4. Would screen corner of Broadway (County 75)
and Pine Street (Hwy 25). 5. Project within time schcdule and scope of redevelopment plan. 6.
Attempted to or talked to all but two property owners. Upcoming meeting scheduled with
Froslie. Johnson continued stating they hope to keep moving forward with public hearing in
December and then more accurate numbers. Pieces are moving slowing together. Metro Plains
is looking to build 28-34 townhouse, for-sale units on the northerly half ofthe block. Parking is
projected to exceed current stalls of 78 off-street and 50 Walnut. Off street surface parking of
134 (57 for Walgreens) and 57 Walnut. The only thing sure at this point is the need to modify
the Plan. Redman, thc developer, has constructed up to 10 new stores per year for Walgreens.
With lots of loose ends, plans are for an early or late 2004 start. Johnson eXplained studies by
Walgreens indicate zero-lot lines reduce revenues and the need for drive-up phanllaey and
ingress/egress. The proposed non zero lot-line is cOlllpatible with the Theater/MN Workforce
Center corner across the street as well as the Platinum Realty building. Unlike the Town Square
project, the traffic counts along Broadway are 12,000 ADT and Pine 22,000 ADT which is not
compatible with pedestrian traffic. The Walgreens' project would serve as the north anchor
much as Cub, the south anchor. Commissioner Lahr asked, why not what we want? Small town
- people want parking close for convenience while Ridgedale - will walk for selection. Johnson
indicated Walgreens will move closcr to Broadway if diagonal parking were allowed by the
County much like the proposed James & Gruber projcct. Walgreens is a convenience store like a
gas station with a pharmacy but without pumps. Commissioner Andrews stated so the city gets
the Ford instead of the Cadillac with a created artificial intersection. We're asked to spend
dollars on a project which doesn't fit the plan bceause this proposal is economical today and is
something we'd have to live with for years to come. Johnson stated Walgreens is the driver and
thc project appcars feasible with an estimated annual $85,000 of tax increment. We've waitcd
seven years and only Walgreens has come forward and has a strong balance sheet. Frie asked, is
the Walgrcens and Metro Plains projects depended on each other? More or less rcspondcd
Johnson. Fair said hc was opposcd today unless the comp plan is amended. Scott Douglas and
Keith Kjellberg voiced opposition to selling. Pat Sawatzke said he and his wife purchased the
house next door to their salon two weeks ago for a planncd $3.5 mill ion project and wi II need to
study thc impact of this project on their proposed project. Chair Andrews noted at this point the
HRA has not approved any TIF assistance. Johnson submitted a eonecpt site plan and a design
from a Mukwonago, WI project. The commissioners also reecived a copy of the traffic study by
WSB, Inc. based on the very first concept, the study indicated the need to open Walnut Street at
River Street.
B. Other relluest for financial assistancc.
Commissioners were given a copy of the TIF information submitted to .lames and Gruber and
Bruce Ilamond per HRA direction in October.
7.
Consideration to approvc a rec0l11l11endation for Citv Council consideration to authorize
preparation of a purchase agreement for aClluisition of said property for industrial development.
Koropehak made a presentation using over-heads of the process and information gathered by the
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HRA Minutes - 11105/03
Subcommittee ofHRA Commissioner Dan Frie, IDC members Mary Barger and Dick Van
Allen, Administrator Wolfsteller and herself. Through the researched information, the group
was able to narrow a site for recommendation to acquire for industrial development consistent
with the IDC/HRA goal to provide a continuous stream of available industrial land with
infrastructure potential. With the recommended site being the Otter Creek Crossing 114+- acres
at a cost of approxilnately $70,000 per acre for land acquisition, street and utility infrastructure
improvements, and trunk fees; Ehlers and Associates ran a cost analysis using TIF revenues over
20 years with an annual 50,000 sq ft building and five acre build-out. Expenditures included 5%
interest rate for internal loan (land), 4.5% interest rate for bonds (infrastructure), and 3%
inflation rate for trunk fees. Given this analysis, the City would need to sell or market the land
for at least $33,000 per acre or .7575 per square foot. Next, the HRA reviewed a comparison of
the current TIF finance method and the proposed TIF finance method wherein the developer's
investment of up- front mon ies is less, the city retains all of its trunk fees, and is wiser use of
marketing funds. Lastly, the com III issioners reviewed the recommendation and rational of the
subcommittee. Wolfsteller suggested the use of city reserves for a cash buy-out as this a better
investment (interest rate) than what he could currently get on any other investment. The
HRA/City have a combined $931,000 in reserve funds.
DARRIN LAHR MADE A MOTION RECOMMENDING THE CITY COUNCIL CONSIDER
AND APPROVE AUTHORIZING THE PREPARATION OF A PURCHASE AGREEMENT
FOR ACQUISITION OF APPROXIMATELY 114-120 ACRES OF OTTER CREEK
CROSSING FOR INDUSTRIAL DEVELOPMENT SUBJECT TO TERMS AND
CONDITIONS OF TIlE CITY COUNCIL. SUGGESTED TERMS AND CONDITIONS:
COUNTER-OFFER OF 10% DISCOUNT FOR CASH (.55 CENTS PER SQUARE FOOT),
COUNTER-OFFER EXPIRES NOVEMBER 30, 2003, CLOSING DATE OF NOVEMBER
2004, MINING TERMINATES NO LATER THAN MAY 1,2005, SUBJECT TO SOIL TESTS,
TOPOGRAPHIES, DEFINE BOUNDARIES, AND SUCH ITEMS DESCRIBED BY CITY
COUNCIL ^ND THE CITY ATTORNEY. COUNTER-OFFER BASED ON HIGII COST TO
DEVELOP INFRASTRUCTURE. SECONDED BY STEVE ANDREWS. Bill Fair asked if
somc monics from the sale of land by the city would be set aside for future industrial land rather
than again come from a tax levy. Koropchak noted that was a good question and stated at
economic development conference's that is encouraged. WITII NO FURTIIER DISCUSSION,
THE MOTION CARRIED ON A 4-0 VOTE. BARGER ABSENT. The commissioners were
encouraged to attend the City Council Workshop on Monday, November 10,2003, at 6:00 p.m.
8.
Consideration to hear follow-up of O'Connor's relluest for status of business relocation claim.
The commissioners were given a copy ofthe October 14,2003, lettcr from Mike O'Connor's
attorney, John Peterson, relative to the status of business relocation claim at the former 218 Front
Street address and a copy of the October 21,2003, response letter from the HRA as prepared by
Attorncy Bob Lindall. No action was required of the HRA.
9.
Consideration to authorize payment of HRA bills.
DAN FRIE MADE A MOTION TO AUTHORIZE PAYMENT OF THE OCTOBER lIRA
BILLS. SECONDED BY DARRIN LAHR AND WITH NO FURTHER DISCUSSION, TilE
MOTION CARRIED ON A 4-0 VOTE. BARGER ABSENT.
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HRA Minutes - 11/05/03
10.
Consideration of Executive Director's Report.
The commissioners accepted the Executive Director's Report as written with no questions or
additions.
II. Committee Reports.
None.
12. Other Business.
The HRA briefly discussed the request and need for a joint meeting between members of the
City Council, Planning ConHnission, and HRA.
13. Adiournment.
ing adjourned at 7:50 p.m. by a consensus of the commissioners.
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