HRA Minutes 08-04-2004
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, August 4, 2004 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners:
Chair Bill Fair, Vice Chair Darrin Lahr, Brad Barger, and Steve
Andrews.
Commissioners Absent:
Dan Frie
Council Liaison:
Roger Carlson
Staff:
Rick Wolfstellcr, Ollie Koropchak, and Angela Schumann.
1. Call to Order.
Chairman Fair called the meeting to order at 6:00 PM and declared a quorum.
2.
Consideration to approve the June 14,2004 HRA minutes.
MOTION BY COMMISSIONER BARGER TO APPROVE THE MINUTES OF THE
JUNE 141\ 2004 I--IRA MEETING.
MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED.
3. Consideration of adding or removing items from the agenda.
A report from Masters 5th Avenue on a downtown project was added as an item between
current items 4 and 5.
A discussion on -1'win City Die Cast's job creation was added as number 11.
4. Consent Agenda.
A. Consideration to adopt a resolution approving the decertification of TIF District
No. 1-13 (Standard Iron & Wire Works, Inc.) of the City of Monticello
MOTION BY COMMISSIONER ANDREWS TO APPROVE Tl IE CONSENT
AGENDA.
MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED.
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Report from Masters 51h Avenue
Brad Johnson, representative for Masters 51h Avenue, presented the Commission with a
pro forma, analysis of the but-for test, and revised concept for Landmark Square II. A
return-on-investment and equity analysis is included in the but-for test.
The proposal is diffcrent than thc housing project previously approved by the HRA.
Fluth thanked lIRA for their paticnce and cooperation as they workcd through the last
concept. Johnson stated that in requesting the creation of the new district for this project,
they are seeking pay as you go. Johnson indicated that some tenants are concerned about
downtown growth in relationship to the growth in other areas of the community. Johnson
stated that they believe the key is to crcate a reason to go downtown.
Masters 5th Avenue's current concept adds at least one restaurant to the downtown area.
Johnson referred to the concept plan and noted that the parking layout is somewhat
ditlercnt to accommodate the need for greater parking. The proposed plan accounts for at
least 7 spaces per 1000 fcet.
The developers are also considering an option to create a second story. However, they do
have rcservations about thc mix of uses and consider it Icss risk to keep it <me-story.
Johnson stated that the developer is morc comfortable owning the properties and leasing
the units.
Koropchak noted that it would be important for the developers to cxamine up-front
whethcr they could meet the 15% improvement tcst.
Johnson cxplained that the developer has all thc land reprcsented in thc concept plan
undcr contract. He also noted that as the area is already zoned properly for this type of
development, they don't need to go through a lot to get this project to move.
Fair asked if the project all be retail. Johnson stated that it would be, however, if they
went two stories, the second floor would be commcrcial.
Koropchak stated that moving forward on this proposal would involve crcating a new TIF
district and K noted that when a new TIF district is formed, there is a required
development agreement and a fee of $7,500. She inquired what the developers are
requesting currently from the BRA.
Johnson stated they would like to know if thc HRA would likc to move this project
forward.
Fair asked ifliquor licenses are still avai lable in terms of anticipating the needs of
prospective tenants. Wolfsteller indicatcd that there are licenses available.
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Pair, Lahr and Barger expressed that they are in favor of the proposed plan.
Fair asked about the developer's timetable for the project. Barry Fluth, the project
developer, stated it depends on the tenants. They are hoping to break ground this fall.
Angela Schumann indicated that the developers could work towards the September DA T
agenda in September and should work with planning staff in working through plan
details.
5. Consideration to review a Purchase Agreement for acceptance, reiection, or counter-offer
for the property located at 725 West 3rd Street.
Koropchak noted that the liRA had discussed this item briefly at the special meeting.
The otfer presented states "as is", and declines inspection.
Koropchak stated that she had spoken with Commissioner Prie on the otTer. She noted
that the home is not a rental. Frie recommended that the HRA not offer more than
$100,000.
A brief discussion on the merits of the proposal ensued.
MOTION BY COMMISSIONER ANDREWS TO REJECT THE PURCHASE
AGREEMENT AS PRESENTED AND NOT INTERESTED.
MOTION SECONDED BY BARGER. MOTION CARRIED
6. Consideration to review for discussion housing rehabilitation and redevelopment program
criteria from City of Richfield and Crystal.
Koropchak referred to the information on similar programs provided by Richfield and
Crystal. Koropchak noted that Richfield's loan program for rehabilitation was the
program that most interested Chair Pair.
Richfield's program required a minimum of $50,000 in remodeling costs for an interest-
free loan and up to a maximum of $15,000. Thc loan would be payable upon the sale of
home or forgiven after 30 years. Koropchak stated that the information did not specify
whether it applied to intcrior, exterior, or both.
Fair askcd if Richfield targetcd a specific type of housing, for example the lowest
valuations. Koropchak stated that she did not think so.
Koropchak also rcferred to Richfield's new construction program. The buyer enters into
a developmcnt agreement with the HRA. The premise is to buy existing low valuation
homes, tear them down and build something new.
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Fair indicated that he is seeking an opinion from the other Commissioners on whether the
HRA is interested in a housing rehabilitation or redevelopment project. He would also
like to know if there is interest in the progrmn, what types of guidelines would be
acceptable.
Wolfsteller indicated that a progranllikc this seems to be a place where the HRA started.
Koropchak compared it to downtown revitalization program for fa<;:ade improvements.
Koropchak offered to set up a meeting to talk with builders, bankers and the building
department about the concept.
Lahr asked how much was available for this program. Koropchak answered that
approximately $450,000 was available.
The Commissioners discussed guidelines for a concept progrmn, including desired
project outcomes, financing options and terms, the inclusion/exclusion of rental
properties, program incentives and the costs of rcmodeling.
fair recommended the commissioners look over information, write down their ideas and
come back with suggestions at the next meeting. Fair also asked stalT to seek more
information from banks and realtors. Fair recommendcd a workshop with some of the
professionals to discuss the project. Fair directed staiTto explore how many people are
taking advantage of the Richfield and Crystal programs.
7.
Consideration to discuss request for continued monetary support for industrial
development - 2005 Budget Preparation.
Koropchak stated that budget requests are needed for the coming ycar. Previously, thc
HRA committed $500,000, with the City matching close to that, creating a total of about
$ 1 million for the project. The Small Industrial group has lobbied to continue funding to
keep this project going.
Koropchak indicated that the City is close to elosing on thc Chadwick deal. The funding
for continucd support would come from districts 5 and 6. Koropchak stated that therc is
about $600,000 available. Koropchak noted her recommendation as outlined in the staff
rcport .
Fari ask cd if the additional investment would be for improvements to prepare the land.
Koropchak explained that thc funds would be for purchase or improvements. Wolfsteller
indicated that the money previously allocated will most likely be gone in the purchase
oD5 acres, another $300,000 would be needed for the improvements.
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MOTION BY COMMISSIONER BARGER TO COMMIT $100,000 OF 'fIF FUNDS
FOR INDUSTRIAL LAND DEVELOPMENT AND REQUEST THE CITY COUNCIL
MATCH TJIE $100,000 FOR BUDGET YEAR 2005.
MOTION SECONDED BY COMMISSIONER LAHR, NOTING THAT THE CITY
COUNCIL MATCH WAS REQUIRED TO SECURE HRA fUNDING.
MOTION CARRIED.
Koropchak noted that the Marketing Committce had approximately $25,000 left in
funding. She inquired whether additional funding would be necded for marketing the
industrial park and possible housing project and should be requcsted during budgeting.
Barger inquired how long it would take to get improvements into the new industrial park.
Wolfsteller commented that they should be in sometime next summer. Barger indicated
marketing should begin before that.
Lahr stated that $25,000 seems reasonable at this time.
8.
Consideration to authorize payment of lIRA bills.
Fair questioned the invoice from O'Connor. Koropchak statcd that shc would discuss the
matter with Bubul.
MOTION BY COMMISSIONER ANDREWS TO AUTHORIZE PAYMENT OF HRA
BILLS.
MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED
9. Consideration of Executive Director's Report.
Koropchak noted that the annual TIF reports did get in on time.
Barger inquired where industrial leads come from in the majority of cases. Koropchak
stated that most come through phone calls.
Koropchak informed the HRA of two reccnt rezoncs from industrial to commercial
property.
10. Committee Reports.
A.
Marketing - Koropchak noted the two marketing pieces put together on behalf of
the IDC for rcsident guides.
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B.
Small Industrial Group - Koropchak discusscd a recent letter from United
Properties requesting joint marketing of industrial lands. Koropchak statcd that
the IDC is not interestcd in working with UP. Koropchak stated that UP has
expressed interest in purchasing the whole park. Fair indicated that the joint
marketing proposal is a little prematurc. Koropchak did note that the IDC is
conccrned that UP will buy the proposed City park from Chadwick. Wolfsteller
stated that the Purchase Agrecment prevents Chadwick irom selling to othcrs.
11. Twin City Die Cast Job Creation
Koropchak explained that the compliancc date fi:)f job crcation had been extended, and
that job and wage levels had been amended at that time. Howcver, when the company
recently completed their report f()r the new compliance date, they fall short of the wagc
rcquirements. Koropchak described the remedy/eriteria in the contract which states that
ifthere is a deficicncy in wages, the HRA's pay-as-you-go would be reduced at a rate
based on the number of jobs they are deficicnt, approximately $5300 per job. Koropchak
has emailed Bubul fi:)r confirmation but has not had received a reply.
Lahr recommended that we fi:Jllow what the state does in similar situations.
Wolf5teller also recommcndcd finding out thc state's response. In the interim, he
recommended sending a letter notifying Twin City Die Cast about the deficiency. The
Commissioners supported Wolfstcller's rccommendation.
12.
Other Business.
Koropchak stated that the proposed I-94/CSAll 18 interchange will be discussed at the
upcoming Council workshop.
13. Adiournment.
MOTION BY COMMISSIONER BARGER TO ADJOURN AT 7:45 PM.
MOTION SECONDED BY COMMISSIONER LAI-IR. MOTION CARRIED.
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HRA Chair
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