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HRA Minutes 10-06-2004 - . . . HRA Minutes 10-06-04 MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AlJTIIORITY Wednesday, October 6, 2004 - 6:00 p.m. 505 Walnut Street - Bridge Room Commissioners Present: Chair Bill Fair, Vice Chair Darrin Lahr, Dan frie, Brad Barger, and Steve Andrews. Council Liaison: Roger Carlson. S ta ff: Rick Wolfsteller, 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 September 1, 2004 HRA minutes. MOTION BY COMMISSIONER fRIE TO APPROVE THE MINUTES. MOTION SECONDED BY ANDREWS. MOTION CARRIED. A NOTATION WAS MADE TO AMEND SEPTEMBER'S MINUTES TO SI lOW COMMISSIONER LAIIR AS PRESENT. ,., j. Consideration of adding or removing items from the agenda. None. 4. Consent Agenda. None. 5. Consideration to review a draft copy of the Monticello Transformation I lome Loan Program Criteria, Application Form, and Remodeler Form for adjustment. Koropchak reviewed the draft materials prepared for the loan program, indicating that they followed the Richfield program as a model, although Koropchak had targeted a specific area and value in developing the draft materials. Koropchak had included the recommendation that the program loan up to 20% of the remodeling costs if the model costs are $50,000 or greater, but not to exceed $20,000, with the criteria that the loan would be forgiven after 5 years. Koropchak spoke with Attorney Bubul about the pre-remodeling condition report as I - HRA Minutes 10-06-04 . required in Richfield. Bubul had related that it was a requirement for such funding programs. Since 1997, HRA's are required to hire inspectors for projects within the redevelopment district. Koropchak noted that as pooling dollars would be used for this project, an inspector will need to be hired. Koropchak explained that she would be speaking with the Building Department about the program, noting that as the department is already busy, it would need to be reviewed whether the Building Department can fully complete the advisor services as outlined. Fair noted that with only $150,000 being potentially allotted for the pilot project, they could do approximately 8 houses per year. This would require only 8 pre~rem()deling inspections. Fair inquired whether a specific checklist could bc developed to make thc process more consistent. Koropchak stated that the Richfield advisory service did have checklist that could be used as a model. Fair askcd if the HRA could contract out pre-remodeling inspections. Koropchak indicated that they could be. . Lahr clarified that the inspection is required to determine that the home is sub-standard. That inspection would be separate from the remodeling advisor inspection. The redevelopment district would necessitate that certain criteria need arc mct. l.ahr inquircd whether a qualified inspector could train a Monticello building inspector to do inspections subsequent to the first few. Koropchak stated that she thought that would be acceptable, in which case the two inspections could occur together. Barger ask cd if monies could be used from other districts. Koropchak indicated that funds for this program had to be from a redevelopment district. Thc conscnsus of thc Commissioners was that the HRA would like to continue looking at the project. Koropchak noted her reservation that it may be difficult to get people to fully utilize the program. Andrews noted that there is little risk to the HRA to launch the program as a pilot project. Fair commented that it will be important to target the program appropriately and possible to develop a workshop to potential resident candidates. Koropehak also recommended that a time-frame for completion be included in the project criteria. Frie stated that banks have time frame requirements and the HRA's criteria could shadow those requirements. Due to issues surrounding potential planning review, Fair reeommended a time cap of 6 months from thc issuance of building permit. The Commission discussed the funding level for the pilot project as a whole, as well as minimum remodeling expenses and maximum liRA loan funds per project. . 2 - . . . HRA Minutes 10-06-04 Lain sought clarification on percentage calculation for determining the amount of HRA funding. It was clarified that the loan amount would he a straight 20% of the total remodeling costs. Barger asked if the bank providing the potcntial user with financing could use thc liRA money as equity. Koropchak stated that Richfield's project requires that a loan is already closed or committed. Barger indicated that the $20,000 as equity would help secure a larger qualification. In the Richfield model, thc monies go dircctly to the lender. Fair recommended meeting with bankers to identify the steps of the actual loan process. 'fhe Commission determined that homeowners should not receive cash back for labor, however, they should be allowed to provide swcat equity. The Commissioners also determined that the loan funding would be 20(% of what the horrowed amount is, not the detcrmined value of the improvemcnts. HRA directed staff to continue researching the project in terms of the discussion items. It was noted that at the time the details of the project were outlined, staff would prepare a report for City Council. 6. Consideration to adopt a resolution decertifying Economic TIF District No. 1-17 and No. 1-21, to authorize close-out of five Economic TIF Districts, and to requcst the reimbursed tax he allocated to the liRA General Fund. MOTION BY COMMISSIONER BARGER TO ADOPT A RESOLUTION DECERTIFYING ECONOMIC TIF DISTRICT NO. 1-17 AND No. 1-21, AND TO AUTHORIZE CLOSE-OUT OF FIVE ECONOMIC TIF DISTRICTS: 1 ~ 17, 1-21, 1-15, 1-13, and 1-14, AND TO REQUEST TilE REIMBURSED TAX BE ALLOCATED TO THE HRA GENERAL FUND. MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED. 7. Considcration to rcvicw and approve Performance Measure f()r the Otter Creek Crossing Industrial Business Park. Koropchak reviewed her recommendations as outlined in the staff report, noting that the performance measure will act as a guide in selling the property. The measure determines what property will be sold for and what the manufacturer needs to meet in terms of building, storage, landscaping and other criteria. Koropchak provided an cxplanation of potential land costs based on the performance 3 - . HRA Minutes 10-06-04 measure and compared to other industrial areas. Koropchak noted that the criteria prohibits one large buyer from purchasing all the land and acting as the developer. She also explained that TIF will go towards paying off the bonds for infrastructure. Koropchak indicated that the small group will be meeting with City Engineer Bret Weiss and City Planner Steve Grittman about the performance measures and discussing improvements and zoning issues. Koropchak stated that she would recommend asking Council for the HRA to act as manager of the site and sell/market the property. This would be consistent with the HRA being involved in creating the TIF district. Under the terms of the district, potential buyers will have to sign the development agreement. This arrangement gives the HR.A the authority to negotiate but leaves Council with the final approval. Barger asked if sales would need to meet the but-for test. Koropchak indicated that was correct. Koropchak noted the non-refundable fee for development agreement, which is due to expenses involved in the platting process. It also helps to cover the cost of drafting that development agreement and TIF process. . Barger asked how the land sale price would be determined for two story buildings. For example, would prices be based on tC)Qtprint or usable square footage. Koropchak indicated that she would clarify that requirement with other communities with similar measures. I,ahr recommended aiming high in terms of land pricing, as the land will continue to increase in value. Barger also recommended increasing the measure for both jobs and cost per acre. Fair requested that stafTprovide performance measures from other communities with similar projects so the HRA could make a comparison. Koropchak noted that the draft performance measure presented represented the averages of what she had seen for other areas. Barger recommended that perhaps the staff could also prepare a land price per square foot versus acre. Koropchak indicated that remedies for those not meeting criteria will need to be outlined. Koropchak also stated that the small group would be discussing buildings materials and the establishment of covenants and other amenity requirements, citing the Pfeffer companies as an industrial site developer that establishes site covenants. hie recommended going with a more liberal zoning designation and then setting stricter covenants, which would give the City greater flexibility. . 4 - . . . 11. HRA Minutes 10-06-04 Koropchak will do more research and provide the lIRA with feedback from IOC small group at the next meeting 8. Consideration to authorize payment of HRA bills. None. 9. Consideration of Executive Director's Report. Koropchak reviewed her staff report, clarifying that the Landmark Square II project will need to hire an inspector, per previous discussion on redevelopment projects. Fluth did sign a preliminary agreement and provided the deposit funds. If the project doesn't move forward, the City will reimhursc him. 10. Koropchak noted that Tom Holthaus had rcquested that she run TIF funding numbers on a four-house development. Koropchak estimated that it would take 25 years to collect money if Holthaus met the hut-tor test and the HRA authorized a redevelopment district. Committee Reports. None. Othcr Business. None. 12. Adjournment. MOTION BY BARGER TO ADJOURN AT 7:30 PM. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED. /h/~~ HR1\ CIIAIR 5