HRA Minutes 03-03-2004
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, March 3rd, 2004 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners:
Chair Stevc Andrews, Vice Chair Bill Fair, Brad Barger, Dan Fric, and Council
Liaison Rogcr Carlson
Darrin Lahr
Rick Wolfsteller, Angela Schumann
Absent:
Staff:
1. Call to Order.
Chair Andrews called the meeting to order at 6:00 p.m. and declared a quorum, noting the
absence ofHRA member Darrin Lahr and Economic Development Director Ollie
Koropchak.
2. Consideration to approve the February 4th, 2004 HRA minutes.
A MOTION WAS MADE BY TO FAIR APPROVE THE MINUTES OF TIlE
FEBRUARY 4'1'1-1,2004 liRA MEETING. BARGER SECONDED THE MOTION.
MOTION CARRIED UNANIMOUSLY.
3.
Consideration of adding or removing items from the agcnda.
None
4. Consent Agenda.
None
5. Continued - Consideration to approve changcs to the Contract for Private Rcdevelopment
betwccn Masters Fifth Avenue and the lIRA for Landmark Square Phase II.
Brad Johnson provided a report on the project, indicating that thc developcrs would seek
to close on duplex property with ERA funds. Johnson understands that the City's
attorney has recommended a letter of credit be obtained in order to release funds fCJr
purchase. Johnson indicated that the property owner of the lot for duplexes has agreed to
sell. The developers arc requesting that the first letter of credit expire whcn duplex is
completed. Therefore, they are requcsting that the contract language regarding the
expiration date change to begin November 1 st (or sooner depending on tenant) and
completing by April I S\ 2007. The project will pay TIF no matter when land is
purchased. Johnson indicated that $157,000 letter of credit would be returned after
completion of duplex.
Johnson relayed to the commission that the final per lot cost is still an issue. The
developers are still seeking a final lot cost that is closer to $30,000. Johnson stated that
BRA Minutes 03/03/04
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currently, the per lot cost is closer to $39,000. Johnson indicated that one way to reduce
lot cost would be to lower the interest rate on the loan from 6.5% to 1 point over what
note is. He stated that the HRA could accomplish this in a formal action.
Andrews stated his concern that making this concession in this project may be setting the
stage for a similar request in future projects. Johnson re-stated his desire for the HRA to
at least consider the option, as other resulting decisions on this matter will need to be
made. J again remarked that the HRA has no risk on this project in comprison to the
Hans Hagen project. Wolfsteller noted that when the City refinanced bonds in the
summer, the rate would be variable at 1 % over.
Fair inquired about the acceptability of the developer's proposal. W olfsteller stated that
in a pay-as-you-go project, the I-IRA would be paying the developer the interest and
would still cover costs.
In regards to the developer's request to have sewer ~illd water access charges waived,
Wolfsteller also suggested that the HRA and developers consider other alternatives.
Wolfsteller indicated that he would rather see additional tax revenues help pay back those
dollars, rather than waiving SAC and WAC.
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Johnson suggested a combination of a lower interest rate and an exploration of other
options would help the project move forward. He stated that Barry Fluth had talked with
some Council members who would like to see project move forward. Wolfsteller asked
what waiving the two fees would save the developer. Johnson estimated the savings at
about $70,000.
Fair indicated that the project meets criteria of comprehensive plan's vision for the CCD.
He stated that it would increase the tax base without substantial profit margin to
developer. Fair relayed that he thinks it is possible to close the gap and move forward.
Fair stated that he believes that setting policy and SAC and WAC fees is Council's
responsibility. Fair reported that he has no problem with lowering the interest rate.
Barger agreed, stating that they will still be covered by ,ill interest point. Wolsteller re-
stated that SAC and WAC can be paid back to the City by additional TIF.
Frie stated that a lot of work has already gone into the project and noted that the
developers mentioned that the property owners are becoming tentative. Frie would like to
help make project go forward before more change occurs. Andrews expressed his
concern about margin on interest, as he doesn't want this to be policy. Andrews indicated
that the HRA has a responsibility to help reduce tax burden on the rest of the community
in the best way. Frie and Fair stated that though they agree with that, if a project could
happen at market standards, there would be no need for HRA.
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HRA Minutes 03/03/04
Wolfsteller requested that latest financial statement on project should be prepared and
presentcd to the HRA.
A MOTION WAS MADE BY FAIR TO APPROVE THE eHANGES AS OUTLINED
IN DRAFT POUR OF THE CONTRACT FOR PRIVATE REDEVELOPMENT
BETWEEN MASTERS FIFTH A VENUE AND THE HRA FOR LANDMARK
SQUARE PHASE II, WITH AMENDMENTS REGARDING CONSTRUeTION AND
THE ADDITION OF A SUNSET DATE TO THE LOC. MOTION SECONDED BY
FRIE. MOTION CARRIED UNANIMOUSLY.
A MOTION WAS MADE BY PAIR TO DIRECT STAFF TO WORK WITH
DEVELOPER TO CLOSE THE PER LOT COST GAP DISCUSSED. MOTION
SECONDED BY BARGER. MOTION CARRIED UNANIMOUSLY.
6.
Continued - Consideration to hear an update on redevelopment ofI3lock 52.
Bob Cunningham addressed the HRA on behalf of l' old Development. eunningham
provided the HRA with a brief outline of the project to-date, including Council action to
address site concerns and their work with Steve Johnson and other adjacent property
owners. 'fold is not seeking action to condemn; they much prefer to work on a willing
buyer and sellcr basis.
Cunningham indicated that he thinks Told will have a product to bring to the HRA
relatively soon. They have hired real estate eonsultant Fred Kattcr to work with property
owners and have made several property offers.
Cunningham reported that the process seems to be somewhat backwards irom how they
usually work, as they prefer to have site control before eoming to the eity. He would like
to come back in April to provide an updated rcport on the site situation. In the meantime,
Told and Katter will be working with all property owners to move to the purchase
agreement stage.
Cunningham stated that he had read the preliminary development eontract and would
discuss it further with Koropchak. lIe stated that he is available to answcr any of the
lIRA's questions.
Fair inquired about Bubul's memorandum on the properties. He noted that Bubul
recommends that the HRA does not enter into purchase agreement at this time. He noted
that the City would not want to give up that property until they are certain of
redevelopment project because they would be giving up some site control. eunningham
stated that he is anxious to get project moving forward as they are cognizant ofTIF
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HRA Minutes 03/03/04
funding deadlines. lIe indicated a desire to work through contingencies so that the
project can move forward. He stated that the HRA property is a critical piece of the
puzzle. At this point, Cunningham would like to see the City entering into a preliminary
purchase agreement.
Fair noted that transfer of title would need to occur by the June 30th date. Wolfsteller
stated that heis unsure of how to proceed without entering into a formal contract, unless
the City entered into the contract with the purchase agreement as an addendum, with the
contingency that development must proceed. Andrews stated that Bubul' s notation
indicates that the purchase agreement becomes the development agreement/contract.
Andrews inquired about an appraisal on the HRA property. Wolfsteller stated that no
new appraisal had been done. Barger reported an appraisal was completed when the land
was purchased in 1996. Cunningham requested that a discussion on the terms and
conditions take place. Fair recommended contacting Bubul for questions related to his
notes and questions on the terms and conditions.
Cunningham suggested tabling the preliminary development agreement. He suggested a
conference call with Bubul, Wolfsteller and Koropchak to work out the remaining issues
on the purchase agreement and preliminary development contract.
A MOTION WAS MADE BY FAIR TO TABLE ANY ACTION ON THE BLOCK 52
REDEVELOPMENT PROPOSAL AT THIS TIME. MOTION SECONDED BY
BARGER. MOTION CARRIED UNANIMOUSLY.
7.
Consideration to authorize payment of HRA bills.
A MOTION WAS MADE BY FAIR TO AUTHORIZE PAYMENT Of THE HRA
BILLS. ANDREWS SECONDED THE MOTION. MOTION CARRIED
UNANIMOUSLY.
8. Consideration of Executive Director's Report.
THE HRA ACKNOWLEDGED RECEIPT OF REPORT.
Barger inquired ifthere were any properties in Monticello with rail access on north side
of freeway. Wolfsteller stated that he is not aware of any properties available directly
adjacent to the railway.
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9.
HRA Minutes 03/03/04
Committee Reports.
Small Industrial
Frie reported that the Small Industrial group is working on non-hinding letter of intent
with Chadwick. Council has authorized moving forward with purchase agreement. Frie
stated his heliefthat a City industrial park would producc favorable results for the City.
Members of the Small Industrial group also meet with Shawn Weinand and Charlie
Pfeffer, who expressed concerns about the City industrial park. Their primary concern is
the assessment on potential Cty. 18/1-94 interchange. At this time, therc has been no
further response from Chadwick. Wolfsteller stated that City attorney has drafted a
purchase agreement. Wolfsteller stated that there may be some resistance on closing date,
although he doesn't believe the closing date to be unreasonable. Chadwick would keep
parcels along interstate and will market them. Fric stated there will most likely be
additional changes hefore the process is complete. The City will also have to try to
negotiate on a parcel to move Chelsea.
Barger stated that he had spoken with someone regarding building a motorcycle business.
Jle relayed information on the Remmele building and parcels along 25.
Marketing
Barger reported that the Marketing group had met with Perry Sloneker, manager of local
Comfort Inn hotel. Sloneker is looking to form a Visitors Association, as a committee
within the Chamber of Commerce. The Visitors Association would focus on huilding
cooperative marketing promoting Monticello's visitor resources. Fair asked what role the
City would have. Barger stated that the group would be seeking partnership funding. If
funding were provided, the City would also have a role in the direction of marketing
efforts. BRA members expressed interest in seeing the Visitors Association proposal.
10.
Other Business.
None.
11.
Adiournment.
A MOTION WAS MADE BY FAIR TO ADJOURN THE MEETING AT 7: 15 P.M.
i]::MOTION. MOTIONCA;::~
liRA Chair ' RecodIer u~:
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