HRA Agenda 03-06-2002
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AGENDA
MONTICELLO HOlJSING AND REDEVELOPMENT AUTHORITY
Wednesday, March 6,2002 - 7:00 p.m.
505 Walnut Street - Bridge Room
Commissioners:
Chair Dan Frie, Vice Chair Brad Barger, Steve Andrews, Darrin Lahr, and
Bill fair.
Council Liaison:
Hrian Stumpf.
Staff: Rick Wolfste11cr. Ollie Koropchak, and Lori Kraemer.
1. Call to Order.
2. Consideration to approve the February 6, 2002 HRA minutes.
3. Consideration of adding or removing items from the agenda.
4. Consent Agenda.
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A. Consideration to adopt a resolution approving the modification of the
Redevelopment Plan of CM RP No.1, and establishment of the TIF Plan for TIF
District No. 1-29 (Housing District).
B.
Consideration to approve authorization to enter into the Contract for Private
Development among the HRA, Front Porch, and the City of Monticello.
C. Consideration to approve authorization to enter into the Contract il)1' Private
Redevelopment among the HRA, Hans Hagen Homes, Inc., and the City of
Monticello.
5. Consideration of feedback from the meeting with Block 52 property owners and action to
move forward if necessary.
6.
7.
8.
9.
1 ().
. 11.
Consideration to discuss fl)1' acceptance the proposed lIRA goals for 2002.
Consideration of authorizing payment of February HRA bi 11s.
Consideration of Executive Director's Report.
Committee Reports.
Other Business.
Adjournment.
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iVlINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, February 6, 2002 - 7:00 p.m.
505 Walnut Street - Bridge Room
Commissioners Present;
Chair Dan Frie, Vice Chair Brad Barger, Steve Andrews, Darrin
Lahr and Council Liaison Brian Stumpf
Staff Present:
Rick Wolf'lteller. Ollie Koropchak, and Lori Kracmer.
Guest:
Eric Bondhus, T. 1. Martin, Inc.
Mike Cyr. MLC Building and Remodeling
1. Call to Order
Chair Frie called the meeting to order at 7: 15 PM.
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Consideration to approve the Januarv 3, 2002 HRA minutes.
A MOTION WAS J\.'IADE BY STEVE ANDREWS TO APPROVE THE MINUTES OF
THE JANUARY 3, 2002 HRA MEETING. BRAD BARGER SECONDED THE
MO~rION. Motion carricd unanimously.
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Consideration of addin~ or removin!.! items from the a!.!enda.
Koropchak addcd the consideration of amending the Private Redevelopment Contract
between Mastcrs Fifth Ave. and the HRA. This was placed as item 12.
4. Consent Aucnda.
A. Consideration to approve the Certificate of Completion for IRTI.
Recommendation: Approve the Certificate of Completion for Integrated
Recycling Technologies. Inc.
B. Consideration to adopt a resolution requesting the City Council call for a public
hearing on the modification of the Redevelopment Plan of CMRP No.1, and
establishment of the TIF Plan for TlF District No. 1-29 (Housing District).
Recommendation: Adopt the resolution requesting City Council call for public
hcaring on the modification of the Rcdevelopment Plan of CMRP No.1, and
establishmcnt of the TIF Plan for TIF District No. 1-29 (Housing District),
C. Consideration to recommend a candidate to the City Council for appointment of
I IRA Commissioncr. Recommendation: Recommend Bill Fair to the City
council for appointment as HRA, Commissioner, cxpiration of term December
2006.
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liRA Minutes - 2/6/02
A MOTION WAS MADE BY DARRIN LAHR TO APPROVE THE CONSENT
AGENDA. BRAD BARGER SECONDED THE MOTION. Motion carried
unanimously.
S. Consideration to hear request relative to Tax Increment Dcficicncv for T. J. Martin. Inc.
Eric Bondhus was present and stated that T../. Martin. Inc. had been dissolved and should
be changed to Lake Tool.
Koropchak advised that she had received a telephone call from Eric Bondhus relativc to
the Icttcr dated January 14.2002 which recapped the accumulated tax increment
deficiency and the balance due on January 25, 2002. Because the property taxes for one-
half ofpayablc year 2001 arc delinquent and remain so as of ./anuary 29. 2002 ($6.304.74
as ofJanuary 3 L 2002 including penalties per Auditor's Office). the deficiency balance
amount is $11.117. If the property taxes hac! been paid. it is estimated the deficicncy
balance amount \vould be $7.413. Given the current income stream and assuming taxes
arc current the estimated deficiency balance on August 1. 2005 would be approximately
$17.000. Koropchak advised the elates of all the letters written to T.J. Martin. Inc.
Bondhus had questioned Koropchak on how the TiF estimates could be so far olT and she
explained that the class rates have continually decreased to a rate in 200 I of 1.50'0 for the
tirst $ t 50.000 and 2'~'-;) over $150.000. and that the tax rate has increased. Koropchak
ai.hiseel that this is one of the last up-front TIF assistance in the amount of$37,900 for
land and site improvemcnt costs. An Assessment Agreement has the estimated market
value listed at least $240.000 which has not been a problem. The construction
completion date was scheduled for October 1. 1997, per the Contract and the Certificate
of Completion was issued Decembcr 1. 1997. The up-front TIF assistance was a loan
from the lIRA General Fund at 8.25% interest rate. accrual date was December 7. 1997.
Pef the Contract. the last TIF payment date is August 1,2005. The liRA elected to
decertify the district as early as possible to avoid the LGA/HACA Match or Penalty.
Legislators did away with the Match/Penalty effective 2002. The maximum life of the
district is II years or November 2007.
To be consistent with past tax increment deficiencies. the business \vas advised annually
of the deficiency and within the last year of tax increment due. the HRA approved
payments of thc tax ddiciency in three equal annual payments without interest.
However, the difference with this district is the TI F payments are due another four years
(August 20(5) and the property tax payment at the County has been delinquent twice.
In conversation \vith the lIRA Attorney. amending the Contract may only add to more
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I-IRA Minutes - 2/6/02
expense and he didn't feel that was the answer.
Bondhus stated that regarding the last payment he unsure if it had been made. He would
check on that. Frie asked Bondhus if he was aware of the amount of the deficiency and
he stated that he was a little unclear as to the amount. The lIRA discussed the fact that
Koropchak does notify the businesses of the TIF deficiencies. along with a payment
schedule. They asked Bonclhus if he would prefer to pay annually or at the end of the
contract. and he stated he would prefer to pay annually. They also discussed that
previously they have waited until the end of the term and allowed the applicant to pay in
3 years at no interest. which Mr. Bondhus stated he would prefer. although they did state
that the lIRA should collect for some of the deficiency now, due to the amount owed.
Chair Fric suggested that possibly each year the HRA could ask for 1/3 of the deficiency
so that they are always within 3 years of being resolved. which would amount to $17.000
divided hy 3 at this time. He also suggested that the HRA revisit the amount of the
deliciency each year.
A MUfION WAS MADE BY DAN FRIE TO REQUEST THREE EQUAL
PA YMENTS OF $2.500.00 EACH. DUE 4/1/02. 4/1/03 AND 4/1/04. AND REVISIT
ANNUALL Y WITH THE INTENTION OF BILLING FOR THE DEFICIENCY AT
THAT TIME. EXTENDING TWO YEARS AFTER 'fl-IE END OF THE TERM AT NO
INTEREST. BASED ON EVIDENCE OF PAYMENT OF CURRENT DELINQUENT
PROPERTY TAXES. BRAD BARGER SECONDED THE MOTION.
After further discussion it was determined that the membcrs preferred payment of
delinquent taxes in fulL along \vith one third ol'the deficiency. each year. Accumulated
balance of thc deficiency to date. 3 years intcrest free.
DAN FRIE AMENDED HIS MOTION ADDING INTEREST TO NEW DEFICIENCY,
IF DEFICIENCY EXISTS. AND THE NEW DEFICIENCY AT TIlE CURRENT 8.25%
RA TE. BRAD BARGER SECONDED THE AMENDED MUfION. Motion carried
unanimously.
6. Consideration to recommend a candidate to the Council fi)r appointment as HRA
Commissioner.
This item \vas placed under the consent agenda.
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HRA Minutes - 2/6/02
7.
Consideration to approve entering into the Contract for Private Development between
Hans IIauen Homes. HRA and Citv of Monticello.
This item was removed from the agenda.
8. Consideration to review returned non-binding: letters of intent for Block 52.
At the H RA meeting of December 200 I the commissioners elected to contact property
owners tc)r Block 52 and request completion of a non-binding letter of intent. The return
deadline was for the January 2002 meeting. I Iowever. we only received one completed
letter of intent from Kathy Froslie. I eontacted some of the owners a second and third
time. Both Steve Johnson and BitT Springborg said they are returning the letters. Froslie
called the other day asking of the I-IRA's intent. Both Steve and Biff said thcy would
submit the letters by the HRA. February meeting.
Koropchak advised that along with the Iettcr of intent rcceived from Kathy Froslie
prcviously. she had also reeeived a letter of intent from BitT Springborg. In previous
convcrsations with Steve Johnson. Koropchak was under the impression his letter of
intent would be submitted as welL but as of to day's date she had not received it.
Koropchak rcminded the mcmbers that the purpose of the letters of intents was to define
the boundary lines for a project. as well as its feasibility.
Koropchak advised that the HRA could purchase these propcrties without immediately
starting a project. The attorney statcd that if the BRA made an offer for the building(s),
including the relocation costs with thc offer for Springborg. stating that the Froslie
building would be handled difTerently in regard to relocation costs. Mark RufFs
recommendation was to enter into an agreement, not to exceed a determined amount set
by the lIRA. Koropchak stating she was looking for direction fi'om the HRA.
A MOTION WAS MADE BY STEVE ANDREWS TO RECOMMEND CHAIR FRIE,
KOROPCHAK. AND ivIARK RUFF CONTACT THE INTERESTED PROPERTY
O\VNI-:RS :\ND DISCUSS OPTIONS. DARRIN LAHR SECONDED THE MOTION.
Motion carried unanimously.
9. Consideration of authorizin!.! pavmcnt of Januarv HRA bills.
A MOTION WAS MADE BY DARRIN LAIIR TO AUTHORIZE PA YMENT OF THE
JANUAR'{ HRA I31LLS. STEVE ANDREWS SECONDED THE MOTION. Motion
carricd unanimously.
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HRA Minutes - 2/6/02
10.
Consickration of Executive Director's Report.
Koropchak updated the HRA on the O"Connor property as well as the Amoco site which
she stated FI uth had not yet executed the amendment to the Contract for additional
parking dollars and also that the site was found to be contaminated and this has caused
another delay.
I n regard to the scattered housing project. the City Counci I approved acquisition of the
Havel parcel at $50,000 and Sheri Harris is proceeding with counter~offers.
Provided copies of the TIF semi-annual payments.
Advised that Ron Musich started a new business, RSM Industries, Inc., which is located
in his vacated building along Chelsea. They refurbish Wagner spray-tech products and
sell nc\v products. Building full - not hiring yet. Plan to employ 25 assemblers. Will run
out of space, looking at St. Cloud and Big Lake. Told of Monticello vacant buildings.
Pfeffer not interested in selling abutting property or at a reasonable price.
Stated the Right Choice building has an interested buyer. Les Wurm, Production
Stamping, Inc. Emmet Hanratty, Right Choice, was assigned the TIF Redevelopment
Contract from Midwest Graphics. I wrote letters and called Mr. Hanratty several times
but never heard from him. It almost appears, Mr. Hanratty vvasn't aware the TIF changed
to up- front. I provided Les with a copy of the contract and the assignments for review. If
assigned, the job creation would not apply but he'd have to agree to pay taxes and tax
deficiency clause. He should get the benefit of the $181,000 from Hanratty.
H-Window building still vacant.
Provided copies of tlyers received from C B Ellis Richardson regarding the Chadwick
property.
The Planning Commission approved concept stage PUD for a commercial condos in the
1-1A district and called for a public hearing on the IT-zoning of an 1-2 parcel (Lundsten)
to B-3 commercial zoning.
The Planning Commission will hold an open house/workshop for comp plan update, no
date at this time. Public hearing March 5, 2002. The HRA should appoint or have
representative at the open house and public hearing relative to HRA recommendation for
development of an industrial parle
Koropehak asked the liRA to establish goals for 2002. Lahr asked Koropchak to put
something together for them to review at the March meeting.
City Administrator Rick Wolfsteller updated them on the mediation regarding the Gold
Nugget project. possibly 1/3 industrial and 2/3 residential. also might be supported by the
to\\t1ship. Regarding annexation, apparently there was a ruling and two parcels were
annexed, under State Statutes, with the City not operating under the MOAA board.
Koropchak stated there was a proposed 41,000 sq ft commercial condominium planned
tC)1' West Chelsea Road in area of Olson Electric pond. On Planning Commission agenda
in March.
Koropchak provided a revised concept plan ham Hans I-ragen, changing from 2 story to I
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lIRA Minutes - 2/6/02
level homes - this due to input trom their marketing people. !-IRA was looking for bmily
type housing. working pro[essionals, larger square footage. They preferred the 2 story.
11. Committee Reports: Marketing - Barger
Nothing to report.
12. Other Business.
Koropchak askecl the HRA to consider amending the Private Redevelopment Contract
with Masters Fifth A venue regarding the former Amoco site. Possibly extending for 60
days which gives them time [or clean up and demolition of the site. The HRA would also
be extending the parking agreement. These would be extended to 5/1/02. Bjorklund is to
demolish and cleanup the site. No [unds have been expended for this project at this time.
A MOTION WAS MADE BY DARRrN LAHR TO EXTEND THE DATES OF THE
CONTRACTS TO MAY 1,2002. STEVE ANDREWS SECONDED THE MOTION.
Motion carried unanimously.
l3.
Adjournment.
A MOTrON WAS MADE BY BRAD BARGER TO ADJOURN THE MEETING AT 9
PM. DARRrN LAHR SECONDED THE MOTrON. Motion carried unanimously.
HRA Chair
Recorder
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4A.
HRA Agenda - 3/6/02
Consideration to approve a resolution adoptine the modification to the
Redevelopment Plan for Central Monticello Redevelopment Proiect No.1; and
establishing TIF DistJ'iet No. 1-29 within Centnll Monticello RedeveloDlnent Proiect
No. I and adopting the TIF Plan therefore.
A. Reference and background:
Sometime ago. the HRA and COlm~il approved the preliminary concept for TIF
assistance for the Front Porch Associatcs, LTD (Vine Place Townhouse) project The
public hearing date for establishment of TIF District No. 1-29 has been set for March 25,
2002, by thc City Council. The TIF Plan was distributed to the taxing jurisdictions on
February 22, 2002, for compliance with the 30-day noticc to commcnt The Planning
Commission will approve the TI F resolution on March 12. Attorney Dan Greensweig,
Kennedy & Graven. has drafted the Contract for Private Development (next item).
As you recall the district being established is a Housing District. The district will consist
of three parcels or a portion of the three parcels plus a portion of vacated public streets in
an area along West 6 Street and Minnesota Street. The district will include the
construction of 1 g single family owner occupied townhouse units. The total project area
will include the construction of 26 units. 95% of the units in the district must be sold to
persons at 100% of median income l()r a l~lmily of one to two ($74,700) and at 11 YYo of
median incon1e for a family of 3 or more ($85,905). The life duration of a Housing
District is 25 years; however, your financial consultant advises as a general rule a
maximum of 15 years.
B. Alternative Action:
1. A Inotion to approve thc rcsolution adopting the modfication to the
RedeveloPlnent Plan for Central Monticello Redevelopment Project No.1: and
estahlishing TIF District No. 1-29 within Central Monticello Redevelopment
Project No. I and adopting the TlF Plan thcrcfor.
2. ^ motion to deny approval of the resolution ..........
J. A motion to table any action.
C. Recommendation:
RccOlnmendation is alternative no. 1
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A Ehlers and Associates
W Tax Increment Financing District Overview
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City of Monticello - Tax Increment Financing District No. 1-29
The following summary contains an overview of the basic elements of the Tax Increment Financing Plan for
TIF District No. 1-29. More detailed information on each of these topics can be found in the complete TIF
Plan.
Proposed action:
Establishment of Tax Increment Financing District No. 1-29 and
adoption of a Tax Increment Financing Plan.
Redevelopment Project:
Adoption of a Redevelopment Plan Modification for the Central
Monticello Redevelopment Project No. I. (Modification is to include the
project activities anticipated in Tax Increment District No. 1-29.)
Type of TIF District:
A Single-Family Housing District
Parcel Numbers:
155-010-084010
155.0 I 0-084080
155-0 I 0-0830 10
Proposed Development:
The District is being created to facilitate the construction of a owner-
occupied housing development that is to be purchased by families with
incomes below 100% to 115% ofmetropolitan-area median income in the
City of Monticello.
The duration of District No. 1-29 will be 25 years from the date of receipt
of the first increment (26 years of increment). The date of receipt of the
first tax increment will be approximately 2004. Thus, it is estimated that
District No. 1-29, including any modifications of the Plan for subsequent
phases or other changes, would terminate after 2029, or when the Plan is
satisfied. [fincrement is received in 2003, the term of the District will be
2028.
Maximum duration:
Estimated annual tax
increment:
Up to $37,045
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TIP District Ov€rvi€w
Proposed uses:
The TIF Plan contains the following budget:
Land/Building Acquisition .......................... $200,000
Site Improvements/Preparation. . . . . . . . . . . . . . . . . . . . . . . . $25,000
Public Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $75,600
Parking Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425,000
Administrative Costs (up to 10%) . . . . . . . . . . . . . . . . . . . . . . . 90,000
PROJECT COSTS TOTAL ........................ $925,000
Interfund Loans/Pay-As- Y ou-Go/G.O. TIF Bonds . . . . . . . . . 500,000
TOTAL FINANCING AND PROJECT COSTS..... $1,425.000
See Subsection 2-10, page 2-5 of the TIF Plan for the full budget
authorization. Additional uses of funds are authorized which include
inter-fund loans and transfers and bonded indebtedness.
Form of financing:
Pay-as-you-go note, including an interfund loan and/or a G.O. TIF bond.
Administrative fee:
Up to 10% of annual increment, if costs are justified.
LGA/HACA penalty: The 2001 Legislature eliminated the provisions for a reduction in state
tax increment financing aid (RISTIF A) or the alternative qualifying local
contribution.
Interfund Loan Requirement: If the City wants to pay for administrative expenditures from a tax
increment fund a resolution authorizing a loan from another fund must be
passed PRIOR to the issuance of the check.
3 Year Activity Rule
(~'469.176 Subd. la)
At least one of the following activities must take place in the District
within 3 years from the date of certification:
o bonds have been issued
o the authority has acquired property within the district
o the authority has constructed or caused to be constructed public
improvements within the district
The estimated date whereby this activity must take place is March, 2005.
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TIP District Ov€rvi€w
4 Year Activity Rule
(~. 469.176 Subd 6)
After four years from the date of certification of the District one of the
following activities must have been commenced on each parcel in the
District:
o demolition
o rehabilitation
o renovation
o other site preparation (not including utility services such as sewer and
water)
If the activity has not been started by the approximately March, 2006, no
additional tax increment may be taken from that parcel until the
commencement of a qualifying activity.
5 Year Rule
(9469.1763 Subd 3)
Within 5 years of certification revenues derived from tax increments must
be expended or obligated to be expended. Tax increments are considered
to have been expended on an activity within the District if one of the
following occurs:
o the revenues are actually paid to a third party with respect to the
activity
o bonds, the proceeds of which must be used to finance the activity, are
issued and sold to a third party, the revenues are spent to repay the
bonds, and the proceeds of the bonds either are reasonably expected
to be spent before the end of the later of (i) the five year period, or (ii)
a reasonable temporary period within the meaning of the use of that
term under g. 148(c)(I) of the Internal Revenue Code, or are
deposited in a reasonably required reserve or replacement fund
o binding contracts with a third party are entered into for performance
of the activity and the revenues are spent under the contractual
obligation
o costs with respect to the activity are paid and the revenues are spent
to reimburse a pay for payment of the costs, including interest on
unreimbursed costs.
Any obligations in the Tax Increment District made after approximately
March, 2007, will not be eligible for repayment from tax increments.
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TIP District Ov€rvi€w
BOUNDARY MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 AND
TAX INCREMENT FINANCING DISTRICT No.1 M29
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02/2a/02 TUE 14:02 FAX 7634413921
FIRST NAT. BANK
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anuary 28 ,2002.
, . , ~&m Office:
729 Main Street
ElkRiver; ,MN 55330~159S ,
Of Elk River' " '.
763/441-2200 .
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722 West 5 Street. "
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. first Natioial Blmk of Elk River is~ieased :to offer you a ~ommitmqnt tofin~ce, the TrF lo~you .'
will be recE:ivingfrom' the MonticellO EDA.., OJjf proposal.for theioan is as fonows,: '.
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Up to $165;000 to for 'initial ;'publlc Impro"ementsto be reimbursed otl'a pay-
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" ",', This~fferwin~xpiI:e:Mar~h 30! 2002.. "
'. Pl~ase'fed free to c~ntact ~~ Ify~u have' ,any' questions orcoticern5~MY direst dial number is 763'-
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Assis,taritVic~ Presl%Wbesin: Anoka, E~RiverrHaSsan,~~hti~ell~~a~d Zi~crman ' .
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SAVINGS BANK
240 JEFFERSON BLVD
P.O. BOX 650
BIG LAKE, MN 55309
PH: (763) 262wBANK (2265)
FAX: (763) 262~2266
31 January 2002
Mr. Michael L. Cyr
Front Porch Associates, LTD.
722 West 5th Street
Monticello, MN 55362
Dear Mike,
First Federal Savings Bank of Big Lake is pleased to outline the following loan terms and
conditions for you Vine Place Town Home Project in Monticello.
The bank: has approved the following terms and conditions:
#1.) Borrower: Front Porch Associated LTD
#2.) Use of funds: To fll1ance the purchase ofland and the construction of town
homes in Monticello
#3.) Loan amount: $325,000.00 w/annual maturity (a revolving line of credit)
#4.) Rate: 71/4 % fixed rate for one year, interest due bank monthly
#5.) Fees: All out of pocket expenses to be paid by borrower
Inspection fees ($75.00 per inspection)
Appraisal fees
Closing fees
Origination fees ($1,000.00)
Title Company fees
All others
#6.) Term: The term will be 12 months with annual renewable options
#7.) Collateral: 1st Mortgage position on the property being purchased and the
homes being constructed
#8.) Aopraisal: An Appraisal will be attained on the fIrst twin home. This
Appraisal will be used to establish the value of the remaining homes
#9.) Loan to value: 85%
#10.) Personal Guarantv: A 100% guaranty from Mr. Michael L. Cyr
OFi=JCES AT: MORRIS: (320) 589-3454 · BRECKENRIDGE: (218) 643-6635 · 81G LAKE: (763) 262-BANK . BENSON: (320) 843-3330
Thank you for this opportunity to present these loan terms and conditions. Please signify
your acceptance by signing below and forwarding an application fee of$500.00 (which will be
applied to the closing costs). We look forward to working with you and yours.
~
~.~
Terry Singsaas
Senior Vice President
Accepted this
1'- 0'
of
-ffib,.. /). J..ry , 2002
Month
ps: Please sign and return this copy to me.
OFFICES AT: MORRIS: (320) 5B9-3454 0 8RECKENRIDGE: (218) 643w6695 . BIG LAKE: (763) 262-BANK 0 BENSON: (320) a43~3330
Day
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Michael L. Cyr
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HRA Agenda - 3/6/02
4B.
Consideration to approve autllOl-ization to,"enter into a Contract for Private
nfvelopmentamOIH! the BRA, the City, and Front Ponh Associates, LTD.
A. n.efel'ence and background:
The Contract fiJr Private Redcvelopment outlines the terms and conditions of'rJF
assistance to the developer, Front Porch Associates, LT (Mike Cyr). The Contract was
draftcd by Dan Greensweig, Kennedy & Gravcn, and a copy provided to the develqper.
Generally, the Contract is executed or agreed upon between the parties, prior to the City
Council approving the establishment of the TIF District. Thc HRA agreed to a total 'rlF
assistance of $163,000 ($105,000 for thc Grubb parcel and $58,000 toward the vacated
public streets.) The TIF assistancc is the pay-as-you-go finance 111cthod at an annual
interest rate of 7.25%. The semi-annual installments shall commence August 1,2004 and
arc subject to ccrtification that devcloper has paid for land, no dehlUlt has occurred, and a
Certiticate of Completion havc been issued for at least 12 townhouses. The installments
shall conclude February 1, 2020. Construction shall commence May I, 2002, with at
least 6 townhouscs completed by December 2002, an additional 6 completed by
December 2003, and an additional six completcd by December 2004, and the remaining 8
by December 2007. The minimum improvement means square fi)otage of approximately
1,320 sq ft main level living space at a initial market value of $148,000. The developer
Illust provide financial commitment {lH' acquisition and construction costs and evidence
of initial purchaser's incollle. The Council will be asked to approve the Contract on
March 25. 2002, as the city became party to the agreement because of the .. acquisition
and conveyance of the public streets.
B. Alternative Action:
1. A motion to approve authorization to enter into the Contract for Private
Development among the HRA. the City, and Front Porch Associates, LTD.
2. A Illotion to deny authorintion to enter into the Contract .............................
3. A motion to table any action.
C. Recommendation:
Recommendation is Alternative No. I.
D. Suppurtin!! Data.
Excerpts of the Contract.
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ARTICLE III
Acguisition Q}' Propyrtv; Finan~.ial Assista!!ce
Section 3.1. Acquisition and Convevance of the Devs:lopment propel1v. As of the date of
this Agreement the Developer has entered into one or more purchase agreements for the
Development Property. Except as set forth in Section 3.2 of this Agreement. neithcr the City nor
the Authority shall have any obligation to acquire any part of the Development Property.
Section 3.2. Conditions of Acquisition and Convevance; Purchase Price. (a) The City shall
convey title to and possession of the City Property to the Developer by a deed substantially in the
form of the deed attached as Exhibit D to this Agreement (the "Deed'} The City's obligation to
convey the City Property is subject to satisfaction of the tl)llowing terms and conditions:
(i) the Developer having submitted to the Authority evidence of financing as
required under Section 7.1;
(ii) the Developer having submitted and the Authority having approved
Construction Plans for the Minimum Improvements:
(iii) the Developer having revievved and approved title to the City Property as set
f()rth in Section 3.4:
(iv)
the Developer not being otherwise in deh1ult under this Agreement;
(v) the City and the Authority having complied with all statutory preconditions
and hearings required for the sale of the City Propcrty and the execution of this Agreement:
and
(vi) the Developer having paid to the City $83,758.
The closing on conveyance of the City Property fi'Oll1 the City to the Developer shall bc on such
date as the Developer and the City shall agree in writing, but in no case later than April 1 ,2002 (the
"Closing Date").
(b) The purchase price to be paid to the City by the Developer in exchange for the
conveyance of the City Property shall be $83,758 to be paid by the Developerto the City at closing.
DKi.1101:,1\1
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Section 3.3. Place of City l~xopertvpocun}.ent Execution, Deljverv. and. Recording.
(a) Unless othenvise mutually agreed by the City and the Developer. the exccution and
delivery of all deeds. documents, and the payment of any purchase price pertaining to the City
Property shall be made at the offices of the City.
(b) The Deed shall be in rccordable form and shall be promptly recorded in the propcr
office for the recordation of deeds and other instruments pertaining to the City Property.
(c) The Developer shall pay on the Closing Date:
(i) the Developer'sattorney'sfecs:
(ii) all costs and expenses of the related to the title insurance described in
Section 3.4: and
(iii) real estate taxes due and payable in the year of closing prorated from the
Closing Date to the end of the year of closing.
(d) 'The City shall pay on the Closing Date:
(i) recording fees or taxes relating to mortgage or lien satistaction:
(ii) real estate taxes due and payable in the year of closing prorated to the
Closing Date:
(i i i) all assessments of record and all pending assessments: and
(iv) recording fees or taxes for the Deed;
Section 3.4. Title. As soon as reasonably practical after the elate of this Agreement the
Developer shall obtain a commitment for the issuance of a policy of title insurance for the City
Property. The Developer shall have ten (10) days from the date of its receipt of such commitmentto
review the state of title to the City Property and to provide the City \vith a list of written objections
to such title. Upon receipt of the Developer's list of written objections, the City shall proceed in
good faith and with all due diligence to attempt to cure the objections made by the Developer. Not
earlier than eleven days following the date the Developer shall have recei ved a commitment for the
issuance of a policy of title insurance for the City Propeliy or. in the event the Developer shall have
providcd the City with a list of \vritten objections, within ten (10) days after the date that all such
objections have been cured to the reasonable satisL1ction of the Developer. the City and Developer
shall proceed with the acquisition and conveyance of the City Property pursuant to Sections 3.1 and
3.2 of this Agreement. In the event that the City has Lliled to cure objections within sixty (60) days
after its receipt of the Developer's list of such objections, either the De\'eloper or the City may by
the gi\'ing of written notice to the other. terminate this Agreement. upon the receipt of which this
Agreement shall be null and void and neither party shall have any liability hereunder. The City
shall ha\'e no obligation to take any action to clear defects in the title to the City Property, other than
D.lCi-2101<1\1
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the good j~lith dlorts described above.
Section 3.5. ~yU COJl(!i!X~:>I~~_ The Developer ackno\vledges that neither the Authority nor
the City makes any representations or warranties as to the condition of the soi Is on the City Property
or any other part of the Development Property or the Adjacent Property or their fitness for
construction of the Minimum Improvements or any other purpose for which the Dcvcloper may
make use of such property. The Developer further agrees that it will indemnify. defend. and hold
harmless the Authority. the City. and their governing body members, officers. agcnts. servants. and
employees. from any claims or actions arising out of the presence. if any. of hazardous wastes or
pollutants on the City- Property or any other part of the Development Property or the Adjacent
Property. The Developer's obligations under tllis Section 3.5 shall survive termination of this
Agreement.
Section 3.6. Pavme)ll of Administrative C(2~!~. The Developer agrees that it will pay upon
demand by the Authority. Administrative Costs (as hereafter detined). For the purposes of this
Agreement the term "Administrative Costs" means out-of-pocket costs incurred hy the Authority
and attributable to or incurred in connection with the negotiation and preparation of this Agreement
and other documents and agreements in connection with the development contcmplated hereunder.
Out-of-pockct Administrative Costs shall be evidenced by invoiccs. statements. or other reasonable
written evidence of the costs incurred by the Authority. As 01' the date of this Agreement the
Devcloper has deposited $5.000 \vith the Authority to be applied toward AdministrativeCosts. The
amount by which this deposit exceeds the Authority's actual Administrative Costs. if any. shall.
upon demand by the Devcloper. be retunlcd to the Developer. but no earl ierthan the date on which
the Developer receivcs a Certi ticate of Completion pursuant to Section 4.4 of this Agreement.
Section 3.7. Land _6"cquisition. [n order to make development of the Minimum
Improvements economically feasible. the Authority will reimburse the Developer. in the manner
and amounts set f(1rth herein. for up to $163.000 of the Land Acquisition Costs, hereby dctined
as: (i) up to $5X.000 of the Developcr's cost of acquiring the City Property: and Oi) up to
$105.000 of the Developer's cost of acquiring the remainder of the Development Property. Any
costs in excess of thesc respective amounts shall be the responsibility of the Developer. Neither
the Authority nor the City shall have any obligation to the Developer or to any third party with
respect to any defects in the construction of the Minimum Improvements.
Section 3.8. kJnancin,!! of !"and Acquisition Costs. The Authority will reimburse the
Developer for the Land Acquisition Costs in accordance with the following tcrms and
conditions:
(a) Subject to the terms and conditions of this Agrecment the Land Acquisition Costs
will be paid together with interest on the unpaid balance thereof at the rate of 7.25% per annum.
interest commencing to accrue on the Closing Date. Thc Land Acquisition Costs will be paid by
the Authority to the De\-eloper in semi-annual installmcnts payable on each February I and
Au!!ust I ("Pa\ment Dates") commencin!! Au!!ust L 2004 and concludin!! no later than the
"- r ...... '- ......
Termination Date. These paymt'nts \vill be made from Available Tax Increment as delined in
this Section 3.8 and frolll no other source.
n.l(j.~ II) I';~\ 2
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(h) The term "Availahle Tax Increment"' mcans eighty percent (80%) of the Tax
Incrcment as calculatcd hy the County and paid to the Authority during the six months preceding
any Paymcnt Date.
(c) The Authority makes no warranties or representations that A vailablc Tax
Increment will be sufficient to pay all or any portion of the Land Acquisition Costs. The
Developer agrees and understands that A vailable Tax Increment is subject to calculation by thc
County and change in State Imv. that on any Payment Date there may not be surticient Available
Tax Increment to pay all or any portion of the amount that would otherwise be paid to the
Developer on that Payment Date. and that all or a portion of Land Acquisition Costs may remain
unpaid after the Termination Date. The Developer further' agrees and understands that estimates
of Available Tax Increment provided by the Authority and its agents, ofticers, or employees are
cstimates only and not intended for the Dcveloper's reliance.
(d) The Authority shall have no obligation to pay any portion of the Land Acquisition
Costs that ren1ains unpaid after the Termination Date. The Authority may prepay all or part of
the Land Acquisition Costs at any time.
(e) The Authority shall not he obligated to make any payment under this Section if:
(i) thcre is an Event of DeLlult on the Dcvcloper's part under this Agreement that has not been
cured: or (ii) the Dc\eloper has t~liled to comply \vith the payment procedures described herein.
(t) At least 30 days bel'l,re becoming entitled to receive its initial payment hereunder
(all such payments to he made at the times and in accordance with the terms of this Agreement).
the Developer must submit to the Authority a payment request certificate signed by its duly
authorized representativc stating: (i) that the Developer has paid Land /-\cquisition Costs in at
least the amount of $163.000: (ii) that no Event of Default has occurred and is continuing under
this Agreement and (ii i) that the Developer has received a Certificate of Completion for at least
12 Townhouses on the Development Property pursuant to Section 4.4 of this Agreement. The
payment request certiticate must be accompanied by evidence satisfactory to the City that the
Land Acquisition Costs have bcen incurred and paid by the Developer.
Section 3.9. Business ~_L,lI2Sidv Agreement. The Business Suhsidy Act does not apply to this
Agreement hecause the assistance being provided hereunder is to promote housing opportunities
within the City.
Section 3.9. Use o(lax Increment. Except as set forth herein. the Authority shall have no
obligation to the Devcloper with regard to its use of Tax Increment and may use Tax Increment t'l,r
any lawful purposes. whether set forth herein or otherwise,
[)J(j.21 () 152\2
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ARTICLE IV
~~onstrustion of (\'~ in im u mJmpro~:e..!l1cnts
Section 4. I. ~'ollstruction of ImprO\:fments. "fhe Developer agrees that it wi II construct the
Minimum Improvements on the Development Property in accordance with the approved
Construction Plans and at all times during the term of this Agreement. \vill operate and maintain.
preserve and keep the Minimum Improvelncnts or cause such improvements to be maintained.
preserved and kept \vith the appurtenances and every part and parcel thereof in good repair and
condition during the term of o\vnership by the Developer. The Authority shall not have any
obligation to operate or maintain the Minimum Improvements.
Section 4.2. Cqnslructio_~l Plans. (a) Bet'lne commencement of construction of the
Minimum Improvements. the Developer shall submit to the Authority Construction Plans. The
Construction Plans shall provide I'(Jr the construction of the Minimum Improvemcnts and shall he in
conformity with the Rednclopment Plan. this Agreemcnt, and all applicable State and local laws
and regulations. The Authority will approve the Construction Plans in writing if: (i) the
Construction Plans conform to the terms and conditions of this Agreement: (ii) the Construction
Plans conf'()I"\ll to the goals and objectives or the Redevelopmcnt Plan: (iii) the Construction Plans
conf'()l"m to all applicable federal. state and local lmvs. ordinances. rules and regulations: (iv) the
Construction Plans are adequate to provide I'll!' construction of the Mini m um Improvements: (v) the
Construction Plalls do not provide t'lw expenditurcs in exccss of the funds available to the Developer
from all sources t'ln construction of the Minimum Improvements: and (vi) no Event of Default has
occurred. Approval may be based upon a review by the City's Building Official of the Construction
Plans. No approval by the !'\uthority shall relicve the Developer of the obligation to comply' with
the terms of this Agreemcnt or of thc Redevelopment Plan. applicable federal. state and local lavis.
ordinanccs. rules and regulations. or to construct the Minimum Improvements in accordance
therewith. No approval by the Authority shall constitute a waiver of an Event of Debult. If
approval of the Construction Plans is requested by the Developer in writing at the time of
suhmission. such Construction Plans shall be deemed approved unless rejected in \vriting by the
Authority. in whole or in part. Such rejectionssh"lll set forth in detail the reasons therefore. and
shall be made within 1 0 days after the date of their receipt by the Authority. If the Authority rejects
any Construction Plans in whole or in part. the Developer shal I submit new or corrected
Construction Plans within 10 days after writtcn notilication to the Developer of the rejection. The
provisions of this Section relating to approval. rejection and resubmission of corrected Construction
Plans shall continue to apply until the Construction Plans have been approved by the Authority.
The Authority's appn.n-al shall not be unreasonably withheld. Said approval shall constitute a
conclusive determination that the Construction Plans (and the Minimum Improvements constructed
in accordance \vith said plans) comply to the Authority's satishlction with the provisions of this
Agreement relating thereto.
(b) I r the De\eloper desires to make any I'vlaterial change in the Construction Plans after
their approval by the Authority. the Developer shall submit the prnposed change to the Authority for
its apprO\al. II' the Construction Plans. as nwditied by thc proposed change. cont'lJrm to the
requirements l)!' this Section ..1-.:2 of this Agrecml'nt \\ith respect to such previously approved
I).IU-21 () 1"2\ 2
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Construction Plans. the Authority shall approvc the proposed change and notify the Developer in
writing of its approval. Such change in the Construction Plans shall. in any event. be deemed
approved b)' the Authority unless rejected. in whole or in part. hy written noticc by the Authority to
the De\'eloper. setting forth in detail the reasons therefor, Such rejection shall be made within ten
(10) days after receipt of the notice of such changc. The Authority' s approval of any such change in
the Construction Plans will not be unreasonably withheld.
Section 4.3. Commen.cement am! Completion of Construction. Subject to Unavoidablc
Delays. the Developer shall commence construction of the Minimum Improvements by no later than
__,_.2002. Subject to Unavoidable Delays. the Developer shall complete the
construction of Minimuni Improvements in accordance with thc following schedule:
(a) At least six Townhouses shall bc completed on the Development Property by no
later than December 31, 2002:
(b) At lcast six additional Townhouses (tl.)r a total of twelve Townhouses) shall bc
complcted on the Developmcnt Property by no later than Dccember 31.2003:
(c) At least six additional Townhouses (for a total of eighteen Townhouses) shall be
completed on the Developmcnt Property by no latcr than December 31. 2004:
(d) At least eight additional Townhouses shall be completed on the Adjacent Property
by no later than December 31,2007.
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All work with respect to the Minimum Improvements to be constructed or provided by the
Developer on the Development Property and thc Adjacent Property shall be in conformity with the
Construction Plans as submitted by the Devcloper and approved by the Authority.
The Developer agrees for itsclt: its successors and a:ssigns. and every successor in interest to
the Development Property, or the Adjacent Property. or any part thercoC that thc Devcloper. and
such successors and assigns. shall promptly begin and diligently prosccutc to completion thc
construction of the Minimum Improvements. and that such construction shall in any event be
commenced and completed within the period specified in this Section 4.3 of this Agreement. The
obligation to construct the Minimum Improvements in accordance with this Section touches and
conccrns the land, and shall run with the Development Property and the Adjacent Property and bc
binding upon all successors and assigns to the Development Property and thc Adjacent Property.
After the datc of this Agreelnent and until construction of the Minimum Improvemcnts has been
completed. the Developcr shall make reports, in such detai I and at such times as may reasonably be
requested by the Authority. as to the actual progress of the Developer with respect to such
construction.
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Section 4.4. ~~ertitieate ~2f Completion. (a) Promptly after completion of the l'vrinimum
Improvements in accordance \\ith thosc provisions of the Agrecment relating solely to the
obligations of the Developcr to construct the Minimum Improvements (including the dates for
beginning and completion thereof). the Authority vvill furnish the Developer with a Certificate
shovvn as Exhibit B. Such certification and such determination shall not constitute evidence of
D.lG-11()1:'1\1
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compliance \\-ith or satist~1Ction of any obligation of the Devcloper to any Holder of a Mortgage. or
any insurer of a iVlortgage. securing money loaned to finance the iVlinimum Improvements, or any
part thereof
(b) Promptly after completion of each Townhouse in accordanec \vith those provisions
of the Agreement relating solely to the obligations of the Developer to construct that Townhouse
(including the dates for heginning and completion thereof). the Authority will furnish thc Developer
with a C ertiticate shO\vn as Exhibit C. Such certification and such determination shall not constitute
evidence of compl iance with or satisfaction of any obligation of the Developer to any Holder of a
Mortgage. or any insurcr of a Mortgage. securing money loaned to finance the Minimum
Improvements. or any part thereof.
(c) I f the Authority shall refuse or fai I to provide any certitication in accordance with
the provisions of this Section 4,4 of this Agreement the Authority shall. vvithin thirty (30) days after
written request by the Developer. provide the Developer with a written statement indicating in
adequate detail in \-vhat respects the Developcr has failed to complete the Minirnum Improvements
in accordance with the provisions of the Agreement. or is othcrwise in det~1Ult. and what measures
or acts it will hc necessary. in the opinion of the Authority. for the Developer to take or perform in
order to obtain such certitication.
(d) The construction of any Townhouse shall be deemed to bc complete upon issuance
ofa certiJicateofoccupancy for that Townhousc. The construction of the Minimum Improvemcnts
shall be deemed to be complete upon the issuance of certificates of occupancy for all 26 of the
Townhouses consti tuti ng the Mini m um Improvements.
Section 4.5. P1<D:. Prior to commencement of construction of the IVlinimum Improvements.
and as a condition precedent to the obligations of the City and the Authority hercunder. the
Developer and thc City will enter into a developer's agreement (the "Developer's Agreement")
pursuant to which the Developer will make certain representations in exchange t()r the City's
approval of a plat consisting of the Development Property and the Adjacent Property, such
agreement to bc in such t()rm as the City and the Developer mutually agree. but in any case
containing such terms as are customary for developer's agreements entered into by the City. Thc
Developer shall timely perform its obligations under thc Developer's Agreement.
DJ(j-2111152\2
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liRA Agenda - 3/6/02
4C.
Consideration to approve authorization to enter into a Contract 1'01. Private
Development amone: the lIRA, the Citv, and Hans I-hu!en Homes, Inc.
A. Reference and background:
The Contract for Private Redevclopnl~nt outlines the terms and conditions of TIr
assistance to the developer, Hans I Iagen lIomes. Inc. (Hans Hagcn). The Contract was
draftcd by Dan Greensweig, Kennedy & Graven, and a copy provided to the devcloP9r.
Thc I--fRA took the lead roll and acquired the parcels and demolished the structures. The
!-IRA agrced to prepare the site as a 1i.nished pad site. The City and l-IRA agreed to
replace the water/scwer lines and street, and install 10 new stubs. Seventy~five percent or
the replacerl1ent costs will be pay from the City general fund and the 25% divided
between tax increment and the city. The Developer agreed to pay $300,000 t()r the
finished pad site and construct 10 row townhouses at a combined estimated market value
of at least $1.9 million per an Asscssment Agreemcnt. Construction to commence by no
later than July] , 2002 and complction of the 10 units by July] , 2003. The developer
must provide financial commitment for acquisition and construction costs. With the
sellj ng price of $300,000 and the tax increment from the project estimated at $170,000
NPY, the I IRA will finance the $130,000 gap ii'om District No. 1-22 Surplus Funds. The
City pledged $35.000 for reimburscment of the Carlson raw land appraised at $78,000
with the r~maining balance from non-restrictivc !-IRA funds. As you recall, the gap
between the acquisition/demolition costs and the reimbursement of the Carlson property
will bc financed through District No. ] -22 Surplus Funds. The Council will be asked to
approvc the Contract on March 11. 2002, as the city became party to the agreement
because of the replacement of the street. water and sewer lines and the acquisition and
development of the green space. Additionally, the !-IRA agreed to purchase the Carlson
property and remove the structures by August 31, 2002 and complete sodding by
September 30, 2002. The Developer wil] dedicate the Carlson property as park land via
the platting process.
One question for the lIRA: Is the HRA wi I ling to agrec that the loser of a lawsuit, should
one arises, would pay for the winner's attorney fees? Initially Hagen preferred a lawsuit
by arbitration. HRA Attorney Greensweig did not agree with arhitration when it involves
TlF. He felt the HRA would be better represented hy a lawsuit as TlF is difficult to
understand.
Planner Consultant Grittman has contacted Hans Hagen relative to the design preference
of two-story fami Iy townhouses. lIis responsc "the rnarkct indicates the need for empty-
nester. higher end, one-story homes." Grittman suggested higher ceiling heights to give
the appearance of row homes. He would play with that idea.
HRA Agenda - 3/6m2
.
B.
Alternative Action:
] . A rnotion to approve authorization to cnter into the Contract for Private
Development among the HRA, the City, and !-Ians Ilagen I Iomcs, Inc.
2. A motilln to deny authorization to enter into the Contract .............................
3. A nlotion to tahle any actiop.
C.Recommendation:
Thc lIRA needs to wcigh the like I ihood of a lawsuit. Perhaps arbitration is a less
cxpcnsive route. Subject to that decision, the rccommendation is Alternative No. I.
D. SUPllOrtine: Data.
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ARTICLE III
Acquisition of Property; Financial Assistance
Section 3.1. AcquisL~0D._<1.'!d Conveyance of the Development.Propertv. As of the date of
this Agreement. the Authority O\vns the Development Property. The Authority will, subject to all
the terms and conditions of this Agreement. convey the Development Property to the Developer for
$300,000.
Section 3.2. ConditionsQL6~ill!i~j!i.9.n <lIl4S-"qQ...\:~yance; Purchase Price. (a) The Authority
shall convey title to and possession of the Development Property to the Developer by a deed
substantially in the tcwm of the deed attached as Exhibit E to this Agreement (the "Deed"). The
Authority's obligation to acquire and convey the Development Property is subject to satisLlCtion of
the follO\ving terms and conditions:
(i) the Developer having submitted to the Authority evidence of financing as
required under Section 7.1:
(ii) the Developer having submitted and the Authority having approved
Construction Plans for the Minimum Improvements:
(iii) the Developer having reviewed and approved title to the Development
Property as set forth in Section 3.4:
(iv) the Developer having executed and delivered to the Authority the
Assessment Agreement:
(v) the Developer not being othervvise in default under this Agreement;
(vi) the Authority having compl ied vvith all statutory precondi tions and hearings
required for the sale of the Development Property and the execution of this Agreement: and
(viii) the Developer having paid to the Authority $300,000.
The closing on conveyance of the Development Property from the Authority to the Developer shall
be on such date as the Developer and the Authority shall agree in writing, but in no case later than
2002 (the "Closing Date").
(b) The purchase price to be paid to the Authority by the Developer in exchange tClr the
conveyance of the Development Property shall be $300.000 to be paid by the Developer to the
Authority at closing.
DJ(j.2078lJ513
tvlN 190-97
7
.
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Section
Recordin.l!.
,., ,.,
_L~.
Place of Develgpl!1ent Propertv Document Execution. Delivcrv. and
(a) Unless othenvise mutually agreed by the Authority and the Developer. the execution
and delivery of all deeds. documents, and the payment of any purchase price pertaining to the
Development Property shall be made at the offices of the Authority.
(b) The Deed shall be in recordable form and shall be promptly recorded in the proper
otlice for the recordation of deeds and other instruments pertaining to the Development Property.
(c) The Developer shall pay on the Closing Date:
(i) The Developer'sattorney's fees;
(ii) Recording fees or taxes t()r the Deed;
(jii) All eosts and expenses of the related to the title insurance described in
Section 3.4; and
(iv) Real estate taxes due and payable in the year of closing prorated tt-om the
Closing Date to the end on the year of closing.
(d) The Authority shall pay on the Closing Date:
(i)
Recording fees or taxes relating to mortgage or lien satisfaction:
(ii) Real estate taxes due and payable in the year of closing prorated to the
Closing Date:
(iii) All assessments of record and all pending assessments, except any taxes to
be levied according to the terms of the ^ssessment Agreement. such taxes to remain the sole
responsibilityofthe Developer and its successors and assigns.
Section 3.4. Title:. As soon as reasonably practieal after the date of this Agreement. the
Authority shall obtain and provide Developer with a commitment te1l' the issuance of a policy of title
insuranee for the Development Proper1y. "fhe Developer shall have ten (10) days from the date of
its receipt of such commitment to review the state of title to the Development Property and to
provide the Authority with a list of written objections to such title. Upon receipt of the Developer's
list of written objections, the Authority shall proceed in good faith and with all due diligence to
attempt to cure the objections made by the Developer. Not earlier than eleven days following the
date the Authorit:, shall have received a commitment for the issuance of a policy of title insurance
for the Development Property or. in the event the Developer shall ha\"e provided the Authority with
a list of written objections. \\'ithin ten (10) days after thc date that all slIch objections have been
cured to thc reasonable satisfaction of the Developer. the Authority and Developer shall proceed
with the acquisition and eon\"eyance of the Development Property pursuant to Sections 3.1 and 3.2
of this Agreement. In the ewnt that the Authority has biled to cure objections within sixty (60)
DI(,-20n')5v -'
I\lNI90-97
8
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.
.
days after its receipt 0 I' the De\eloper's list of such objections. either the Devcloper or the Authority
may hy the gi\'ing of written notice to the other. terminate this Agreement. upon the receipt of
which this Agreement shall he null and void and neither party shall havc any liahility hereunder.
The Authurity shall have no obligation to take any action to clear defects in the title to the
Development Property, other than the good faith eff()rts described above.
Section 3.5. Soil Conditions. The Authority shall. prior to closing. grade the Development
Propcrty at the sole cost of the Authority according to the grading plan attached here to as Exhibit F
(the "Grading Plan"'). The Authority shall provide the Developer with a soils engineer's report that
verifies the condition of the soil shall permit the Developer to construct all ten Townhouses and
install drive\vays, alleys. and sidewalks without any cost to the Developer to corrcct soil conditions
on the Development Property. The Authority hereby represents and warrants to the Developer that
the Authority has neither caused. permitted, or has any kno\vledge of any storage, disposal. or
dumping of hazardous substances on the Development Property in violation of federal or State law
and the Authority further agrees to indemnify the Developer. and its successors or assigns. including
all persons hereafter acquiring an oy,\/nership interest in any part of the Development Property. from
and against any and all liability. loss. costs. damage and expense resulting from or due to the release
or threatened release uf hazardous substanccs. hazardous \vastes. pollutants or contaminants 'vvhich
\vere or are alleged to have been deposited, stored, disposed of or placed on the Development
Property by any person during the period in which the Authority had title to the Development
Property. This indemnificationshall be binding upon heirs, personal representativcs.successorsand
assigns of the Authority.
Section :3 .6. Pavment of Administrative Costs. The Developer agrees that it will pay upon
demand by the Authority. Administrative Costs (as hereafter defined). For the purposes of this
AgreemenL the term "Administrative Costs" means out-of-pocket costs incurred by the Authority
and attributable to or incurred in conncction with the ncgotiation and preparation of this Agreement
and other doculll,ents and agreements in connection with the dcvelopment contemplated hereunder.
Out-of.pocket Administrative Costs shall be evidenccd by invoices, statements. or other reasonable
written evidence of the costs incurrcd by the Authority. As of the date of this Agreement. the
Developer has deposited $5.000 \vith the Authority to be applied toward Administrative Costs. The
amount by which this deposit exceeds the Authority's actual Administrative Costs. if any. shall.
upon demand hy the Developer. be returned to the Developer. but no earlier than the date on which
the Developer receives a Certificate of Completion pursuant to Section 4.4 of this Agreement.
Section 3.7. CqD.~.!!l!~"!.0..n_gLJDlDJ:9vSD:!S11ts. (a) In order to make development of the
I'vlinimum Improvements economically feasible, the City and thc Authority will complete. at the
Authority's sole cost and expense. the following improvements: (i) a project to upgrade, replace,
and othenvise improve the street. sewer. and water infrastructure serving the Development Property;
(ii) dClnolition of an existing house and any other existing structures on thc Carlson Property, such
demolition to occur no later than August 31.2002. and seeding and sodding of the Carlson Property
by no later than September 30. 2002. subject in both cases to receipt by the Authority of all
necessary approvals from the State Department of Natural Resources and any other agency \vith
properjurisdiction: (iii) construction of 10 new waleI' and sewer stubs designed to serve the Parccls:
and (iv) construction or one pad on each of the 10 Parcels. such pads designed to permit
construction of a To\\nhouse thereon and construction of such pads to be completed no later than
1).1( i-~iliX()~\.;
rvlN l'>II.()7
9
.2002.
. (b) The Authority and the City agree with each other. and fe)!" the benefit of no other
person. including but not limited to the Developer. and subject to the right of the City and the
Authority to otherwise pay for any such items out or any funds lawfully available for such purposes.
that the items dcscribed in Section 3.7(a) shall be paid for as follows:
(i) Twelve and one-half percent of the street. sewer, and water inhastrueture
replacement costs shall be paid few by the Authority with Tax Increment. or with tax
increment generated by other property within the TIF District to the extent that such tax
increment is not otherwise committed;
(ii) Twelve and one-half percent of the street. sewer. and water infrastructure
replacement costs shall be assessed by the City against the Carlson Property:
(iii) Seventy-five percent of the street. sewer. and water infrastructure
replaccment costs shall be paid for by the City out of its general runds or out of any other
City which may be la'vvfully used for this purpose;
.
(iv) Demolition of existing structures on the Carlson Property. site cleaning of
the Parcels. construction of the 10 water and sewer stubs. construction of the 10 Townhouse
pads. and grading the balance of the Development Property according to the Grading Plan,
will all be paid by the Authority with Tax Increment. or with tax increment gencrated by
other property within the T[ r District to the extent that such tax increment is not otherwise
committed; and
(v) Twenty-four thousand six hundred dollars ($24.600) of sewer and water
hook-up and trail fees will be paid by the Authority with Tax Increment. or with tax
increment generated by other property within the T[F District to the extent that such tax
increment is not otherwise committed, with any remaining such fees that would otherwise
be due forgiven by the City.
(c) The City and thc Authority further agree that the City shall reimburse the Authority
for $35,000 of the $78.000 appraised value of the land portion of the Carlson Property. such
rcimbursement to be made out of unrestricted City runds and to be paid within 10 days of the date of
this Agreement. with the Authority paying the remaining $43,000 of such purchasc price out of
unrestricted Authority funds.
Section 3.8. ~,usiness Subsidv A,Q:reemen.!. The Business Subsidy Act does not apply to this
Agreement because the assistance being provided hereunder is to promotc housing opportunities
\vithin the Citv.
Section 3.9. Use ofTqx Increment. Except as set forth herein. the Authority shall have no
obligation to the De\'Cloper with rcgard to its use of Tax Increment and may use Tax I ncrement for
any lawful purposes. \vhether set forth herein or otherwise.
.
O.lG.}07X9:i\ -'
I\IN 1')()-'17
[0
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ARTICLE IV
('onstr~!~tion of M in LI'!:lU m Impro\'Cl)!cnts
Section 4.]. Cqnstruct)on 01" Improve!)lents. The Developer agrees that it will construct the
Minimum Imprc)\-ements on the Development Property in accordance with the approved
Construction Plans and at all times during the term of this Agreement. will operate and maintain,
preserve and keep the Minimum Improvements or cause such improvements to be maintained.
preserved and kept \vith the appurtenances and every part and parcel thereof in good repair and
condition during the term of ownership by the Developer. The Authority shall not have any
obligation to operate or maintain the Minimum Improvements.
Section 4.2. COllstructiqJl Plan~. (a) Bef()re commencement of construction of the
Minimum Improvements. the Developer shall submit to the Authority Construction Plans. The
Construction Plans shall provide for the construction of the Minimum Improvementsand shall be in
conformity with the Redevelopment Plan. this Agreement. and all applicable State and local lavvs
and regulations. The Authority \vill approve the Construction Plans in \\Titing if: (i) the
Construction Plans conform to the terms and conditions of this Agreement: (ii) the Construction
Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the Construction Plans
conI()l"ll1 to all applicable federal. state and local laws. ordinances. rules and regulations: (iv) the
Construction Plans arc adequate to provide for construction of the l'vlinimum Improvements: (v) the
Construction Plans do not provide for expenditures in excess of the funds available to the Developer
from all sources for construction of the Minimum fmprovements: and (vi) no Event of De hlld t has
occurred. Approval may be based upon a review by the City's Building Official of the Construction
Plans. No approval by the Authority shall relieve the Developer of the obligation to comply with
the terms of this Agreement or of the Redevelopment Plan, applicable federal. state and local laws,
ordinances. rules and regulations. or to construct the Minimum Improvements in accordance
therewith. No appro\'al by the Authority shall constitute a waiver of an Event of Default. If
appro\al of the Construction Plans is requested by the Developer in writing at the time of
suhmission. such Construction Plans shall be deemed approved unless rejected in writing by the
Authority. in \vhole or in part. Such rejections shall set forth in detail the reasons therefore. and
shall he made \\ithin 10 days after the date of their receipt by the Authority. I f the Authority rejects
any Construction Plans in whole or in part. the Developer shall submit new or corrected
Construction Plans within I () clays after written notification to the Developer of the rejection. The
provisions of this Section relati ng to approvaL rejection and resubmission of corrected Construction
Plans shall continue to apply until the Construction Plans have been approved by the Authority.
The Authority's apprc)\al shall not be unreasonably withheld. Said approval shall constitute a
conc I us i \'C determ i nati on that the Construction Plans (and the M i n i mum I nl provemcnts constructed
in accordance \vith said plans) comply to the Authority's satisf~lction with the provisions of this
Agreement relating thereto.
(b) ll"the DC\'eloperdesires to make any Matcrial change in the Construction Plans after
their appro\'::d by the Authority. other than options normally offered to by the Developer to
purchasers of a to\\nhouse with respect to the interior of any Townhouse. \\hich such options can be
otlercd and implemented without regard to this Section 4.2(b). the De\eloper shall submit the
DJ( i-~(J7S<J,\_1
\IN Iq(J-<J7
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proposed change to the Authority !(')r its appro\al. II' the Construction Plans. as modified by the
proposed change. con 1()J"Jl1 to the n:qu i reml.:nts of th is Section 4.2 0 f th i s Agreemcnt wi th respect to
such prC\iously apprO\ed Construction Plans. the Authority shall approve the proposed change and
notify the Dc\eloper in writing of its approval. Such change in the Construction Plans shall. in any
event. be deemed approved by the Authority unless rejected. in whole or in part, by written notice
by the Authority to the Developer. setting forth in detail the reasons theretor. Such rejection shall
be made \vithin ten (J 0) days alter receipt of the notice of such change. The Authority's approval of
any such change in the Construction Plans will not be unreasonably withheld.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
~-~-, ,. ~----------.."'~,~ .
Delays. the Developer shall commence construction of the Minimum Improvements by the later of
July 1.1001 or 10 da.vs following the Closing Date. Subject to Unavoidable Delays, the Developer
shall complete the construction of J'vlinimum Improvements by July J. 2003. All work with respect
to the Minimum I mprovements to be constructed or provided by the Developer on the Development
Propel1y shall be in contl.ml1ity \vith the Construction Plans as submitted by the Developer and
approved by thc Authority.
The Developer agrees for itsel C its successors and assigns. and every successor in interest to
the Development Property. or any part thereoC that the Developer. and such successors and assigns.
shall promptly begin cll1d diligently prosecute to completion the development of the Development
Property through the construction of the Minimum Improvements thereon. and that such
construction shall in any event bc commenced and completed within the period specified in this
Section 4.3 of this Agreement. The obligation to construct the Minimum Improvements in
accordance with this Section touches and concerns the land. and shall run with the Development
Property and be binding upon all successors and assigns to the Development Property. Alter the
datc of this Agreement and until construction of the Minimum Improvements has been completed.
the Dcveloper shall make reports. in such detail and at such times as may reasonably be requested
by the Authori ty. as to the actual progress 0 f the Dcveloper with respect to such construction.
Section 4.-1-. Certifiulte of.ComrIctiOl~. (a) Promptly after completion of the Minimum
Improvements in accordance with those provisions of the Agreement relating solely to the
obligations of the Developer to construct the Minimum Improvements (including the dates tor
beginning and completion thereof). the Authority Representative will furnish the Developer with a
Certificate shown as Exhibit B. Such certification and such determination shall not constitute
evidence of compliance with or satisfaction of any obligation of the Developer to any Holder of a
J\10rt!.!a!-2:e. or anv insurer of a Mort!-2:a!.le. securin!.l mone\- loaned to finance the Minimum
L "-,.' __ ........ ...... .
Improvements. or any part thereof.
(b) Promptly after completion of each Townhouse in accordance \vith those provisions
of the Agreemcnt relating solely to the obligations of the Developer to construct that Townhouse
(including the dates j()r beginning and completion thereon. the Authority Representative will
furnish the Dewloper with a Certiticatc shown as Exhibit C. Such certification and such
determination shall not constitute evidence of compliance with or satisfaction of allY obligation of
the Developer to any I-Iolder of a Mortgage. or any insurer of a Mortgage. securing money loancd to
finance the Minim um I I11provcments. or any part thereof.
1).1( ;.207X'):",;
~IN I ()(J.C)7
13
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(c) 11' the Authority shall refuse or t~lil to provide any certification in accordance with
the provisions of this Section 4.4 of this Agreement the Authority shall. within thirty (30) days after
written reqllest by the Developer. provide the Developer with a written statement indicating in
adequate detail in what respects the Dcvelopcr has failed to complete the Minimumltnprovements
in accordance with the provisions of the Agreement. or is otherwise in default. and what measures
or acts it will be necessary. in the opinion of the Authority. for the Devcloperto take or perform in
order to obtain such certification.
(d) The construction of any Tovvnhouse shall be deemed to be complete upon issuance
of a certificate of occupancy for that Townhouse. The construction of the Minimum Improvements
shall be deemed to be complete upon the issuance of certificates of occupancy for all 10 of the
Townhouses constituting the Minimum Improvements.
Section 4.5. Plat. Prior to commencement of construction of the l'vI inimum Improvements,
and as a condition precedent to the obligations of the City and the Authority hereunder. the
Developer and the City will enter into a developer's agreement (the "Developer's Agreement")
pursuant to which the Developer will make certain representations in exchange for the City's
approval of a plat consisting of the Development Agreement. such agrcement to be in sllch form as
the City and the Developer mutually agree, but in any case containing such terms as are cLlstomary
for developer's agrcements entered into by the City. including but not limited to the dedication of
the Carlson Property as park land. The Developer shall pert()rm its obligations under the
Developcr's Agreemcnt.
O./(i-207 X')" \3
1\1 N I <)(J,<!7
14
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ARTICLE V
Insurance and Condemnation
Section 5.1. J!l.~~~II~(l:!."!S:.~. (a) The Developer will provide and maintain at all times during the
process of constructing the Minimum Improvements an All Risk Broad Form 8asis Insurance
Policy and. from time to time during that period. at the request of the Authority, furnish the
Authority with proof of payment of premiums on policies covering the f()llowing:
(i) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis."' in an amount equal to one hundred percent (100%) of the
insurable value of the Minimum Improvements at the date of completion, and with coverage
available in nonreporting form on the so-called nail risk" form of policy, lhe interest of the
Authority shall bc protected in accordance with a clause in form and eontcnt satistactory to
the Authority:
(ii ) Comprehensive generalliabi I ity insurance (i nc I udi ng operations. contingent
liability. operations of subcontractors, completed operations and contractual liability
insurance) togethcr with an Owner's Contractor's Policy with limits against bodily injury
and propcrty damage of not less than $1.000.000 tor each occurrence (to accomplish the
above-required limits. an umbrella excess liability policy may be used): and
(iii) Workers. compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Termination Date. the Developer shall maintain. or cause to be maintained, at its cost and expense,
and from time to time at the rcquest of the Authority shall furnish proof of thc paymcnt of premiums
on. insurance as follows:
(i)
a policy or
businesses:
Insurance against loss and/or damage to thc Minimum Improvements under
policies covering such risks as are ordinarily insured against by similar
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), against liability for injuries to persons and/or
propcrty. in the minimum amount tor each occurrence and for each year of $ 1.000,000, and
shall be endorsed to sho\\ the Authority as additional insured: and
(iii) Such other insurance. including workers' compensation insurance respecting
all employccs of the Developer. in such amount as is customarily carried by like
organizations engagcd in like activities of eomparable sizc and liability exposure: provided
that thc Developer may. if permitted b)' la\v, be self-insured with respect to all or any part of
its liability for workers' compensation.
(c) All insurance requircd in Articll.? V of this Agreement shall be taken out and
DJ< i-207X')513
i\IN I ()(}-<17
15
.
.
.
maintained in responsible insurance companies selected by the Developer which are authorized
under thc laws or the State to assume the risks covered thereby. Upon requcst the Developer \vill
deposit annually with the Authority policies evidencing all such insurance. or a certificate or
certificates or binders of the respective insurers stating that such insurance is in force and effect.
Unless otherwise provided in this Article V of this Agreement. each policy shall contain a provision
that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided
below the amounts rcquired herein without giving written notice to the Developer and the Authority
at least thirty (30) days before the cancellation or modifieation becomes effective. In lieu of
separate policies. the Developer may maintain a single policy, blanket or umbrella policies, or a
combination thereof having the coverage rcquired herein. in which event the Developer shall
deposit \vith the Authority a certificate or eertificates of the respecti ve insurers as to the amount of
covcrage in f()rce upon the Minimum Improvements.
(eI) The Developer agrees to notitY the Authority immediately in the case of damage
exceeding $100.000 in amount to. or destruction of. the Minimum Improvements or any portion
thereof resulting from fire or other casualty. In such event the Developer either will forthwith
repair. reconstruct. and restore the M in i m um Improvements to substantially the same or an
improved condition or value as it existed prior to the event callsing such damage and. to the extent
necessary to accomplish such repair. reconstruction. and restoration. the Developer will apply the
Net Proceeds of any insurance relating to such damage receivcd by the Developer to the payment or
reim bursement 0 f the costs thereof
The Developer shall complete the repair. reconstruction, and restoration of the Minimum
Improvements. whether or not the Net Proceeds of insurance received by the Developer for such
purposes are sufficient to pay for the same. Any Net Proceeds remaining after eompletion of sllch
repairs. construction and restoration shall be the property of the Developer.
(e) The Developer and the Authority agree that all of the insurance provisions set forth
in this Article V shall terminate upon the Termination Date.
D.I(i.~()nC):,\3
:--IN !<J().(!7
16
.
.
.
ARTICLE VI
T~~).J1crcment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the
Authority is providing substantial aid and assistance in furtherancc of the development. -rhe
Developer understands that the tax incrcmcnt intcnded to pay expenses of the Authority and the
Developer are deri \ed from real estate taxes on the Development Property, which taxes must be
promptly and timely paid. To that end, the Developer agrees fl.)!' itself in addition to the obligation
pursuant to statute to pay real estate taxes, that it is also obligated by rcason of this Agrcement to
pay before delinquency all real estate taxes assessed against the Development Property and the
Minimum Improvcments during the period the Devcloper o\vns the Develupment Property. The
Developer acknowledges that this obligation creates a contractual right on hehalfofthe Authority to
sue the Developer to collect delinquent real estate taxes and any penalty or interest thereon to the
extent that such taxcs. penalty, or intcrest are assessed or acerue during the period that the
Dcveloper owns the Development Property. and to pay over the same as a tax payment to the
county auditor. In any such suit. the Authority shall also be entitled to recover its costs. expenses,
and attorney fees.
Section 6.2. !~eduction of Ta~es. The Devcloper agrees that prior to the Termination Date:
(1) it \Vi II not seek administrative review or judicial review of the applicability of any tax statute
determined by any Tax Official to be applicable to the Minimum Improvements. the Development
Property. or the DevelopeL or raise the inapplicability of any such tax statute as a defense in any
proceedings. including delinquent tax procecdings; (2) it \vill not seek administrative review or
judicial revie\v of the constitutionality of any tax statute determined by any lax Official to be
applicable to the Minimum Improvements. the Devclopmcnt Property or the Developer or raise the
unconstitutionalityof any such tax statute as a defense in any proceedings. including delinquent tax
proceedings: (3) it \ViII not cause a reduction in the Minimum Market Value (as defined in Section
6.3) paid in respect of the Development Property through: (A) \villful destruction of the Minimum
Impro\Cments. or any part thereof (8) willful refusal to reconstruct damaged or destroyed property
pursuant to Section 5.1 of this Agreement. except as provided in Section 5.1 (e) of this Agreement;
(C) a request to the assessor to reduce the Minimum Market Value of all or any portion of thc
Development Property: (D) a petition to the board of equalization of the County to reduce the
Minimum ]'yIarket Value of all or any portion of the Development Property: (E) a petition to the
board of equalization of the State or the Commissioner of Revcnue of the State to reduce the
Minimum Market Value of all or any portion of the Development Property: (f) an action in a
district court of the State or the tax court of the State pursuant to Minnesota Statutes. Chapter 278.
seeking a redLll:tion in the Minimum Market Valuc of the Development Property: (G) an application
to the Commissioner of Revenue of the State requesting an ahatement of real propcrty taxes
pursuant to i'vlinncsota Statutes. Chapter 270: (II) any other proceedings. whether administrative.
legal or equitahle. \vith any administrative hody within the County or the State or with any court of
the State or the federal go\'t~rnment: or (I) a transfer of the Development Property. or any part
thereof. to an entity exempt from the payment of real property taxes under State Imv. The
Developer shallnol. prior to the Termination Date. apply Ilwa deferralllr abatement of property tax
on the De\c:lopment Property pursuant to any law. regulation. or ordinance.
J)J{ ;.:(),S'i~\.;
:\INIl)()-'ii
17
.
.
.
Section 6.3. Assessment AQreement. (a) Prior to or concurrently with execution of this
--~~~-
Agreement. the Developer shall, \vith the Authority, execute an Assessment Agreement pursuant to
Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's minimum market value (the
"Minimum l'vlarket Value") for each of the Parcels, and all improvements thereon. The combined
amount of the Minimum Market Values for the Parcels and the Townhouses thereon shall be
$1. 900,000 as of January 2, 2003 notwithstanding the progress of construction of the Minimum
Improvements by such date.
(b) Each Assessment Agreement shall be substantially in the form attached hereto as
Exhibit D. Nothing in the Assessment Agreement shall limit the discretion of the assessor to assign
a market value to the Development Property in excess of the Minimum Market Value. The
Assessment Agreement shall remain in force until the Termination Date.
[)J(j-207X<JS, -'
[\IN 190-47
18
.
.
.
HRA Agenda - 3/6/02
5.
COI!,sidenltion of feedback from meetin!! with Block 52 property owners and action
to move fot'ward if necessary.
A. Reference and background:
Consultant Mark Ruft~ HRA Chair Dan Frie, and Koropchak met with Kathy Froslie, BilT
Springborg, Steve Johnson, and Kevin Heaton on Wednesday, February 27, 2002. The
meeting allowed time to gather inflmnation from the,property owners and to infi:mn
property owners ofthe time clock the HRA is under and the I-IRA's need to weigh the
best and most economical site(s) to spend the tax increment.
A recap of the meeting will be presented at the HRA meeting.
.-.-'
..~-......
.
.
1'-------
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71/ ""'"""" ~OonHOOOO
:2 155010052140
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BLOCK 52
1
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S 155010052131
i.[ 155010052110
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7856.702000
4987.374000
18621.480000
7866.432000
3201. 938000
C!TI OF MONTICELLO
CITY OF MONTICELLO
SPRINGBORG,BRUCE A &MARILIN
FROSL!E,MICHAEL W &KATHLEEN
KJELLBERG,MARTI J
.----.-.-..--
FROSLIE,MICHAEL W &KATfll,EEN
CITI OF MONTICELLO
POIRIER,E JOHN
DOUG~3,STANLEI N
JOHNSON,STEVEN C
155010052130
155010052120
155010052132
155010052030
4315.586000
3060.651000
7666.437000
11115.510000
155010052010
155010052031
155010052060
155010052071
8573.663000 KC & THE BOYS LLC
9431.984000 MONTICELLO HRA
9724.994000 JOHNSON,STEVEN C
857. 404500 f'ROSLIE,MICHAEI~.\V &KATHLBEN
330.170900 CITY OF MONTICELLO
1485.596000 JOHNSON,STEVEN C
155010052090
155010052102
155010052101
155010052070
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~~~~~......
.~..-
BLOCK 52
-
I
\ .
.
.
.
HRA Agenda - 3/6/02
6.
Consideration to discuss for acceptance the nroposed lIRA goals for 2002.
A. Reference and backeround:
At the I IRA meeting in February, it was suggested Koropchak run some TIF numbers
estill1ating the amount of tax increment available from TIF Districts No.5 and 6. These
two districts arc not subject to pooling restrictions. Also renlember, TIF can no longer
be used for recreational projects. In running the numbers and beginning in payable 2002,
the tax increment is reduced by about 400;;) due to the classification rate reductions;
however, the property tax remains stable due to the increase in the local tax rate.
Those numbers will be presented at the meeting. The liRA motion of January 1,2002,
recommended the Planning Commission and the City Council to have a completed
industrial park owned by the HRA or City with lots ready to sell by April 2003. As you
recall, the I IRA and City have a reserve fund for industrial development in the amount of
$565,000. Additionally, the surplus tax increment from Districts 5 and 6 could be used
Jor industrial development. With the HRA's annuallneeting scheduled for ApriL Rick
will provide an account of each district and those district which have been closed. It is
important to recognize any anticipated TIF District shortfalls. Also, it is important to
pledge surplus tax increment dollars as a measure to secure those dollars as legislators
keep amending TI F Statutes and our dollars could be lost.
My concentration level is 0 with this flu bug. Sorry, more at meeting.
OZM1ZMOZ 15:ZZ
From-KENNEDY & GRAVEN
+3379310
" ,Ke~llledy
-" ~..". .&-.-.,--
. ,(;ravc:n
470 Pillsb..ry c.;ntcr
200 So..th S;lIo~h ~tr"d
Minnd.pl.ll,) M:-i 55"02
(611) H7.:.UOO tc:kphl)I\"
(G 11) 337.93l0 f~
tmp.//",,,^,,.l..c:1Ulcd,y.gr1,,..n ,l:l.lm
T-775 P,OZ/03 F-766
.
.
February 12,2002
Ms. Oh'le 1<oropch~
Monticdlo HRA
505 Walnut Street, Suite 1
Monticello, M:N" 55362-8822
ROUUT J.LlliPAl.L
AltOm!:)' ~\ L.;.w
Dirc..'t D~ (012)337-!I.ZI!:l
.C~l'tlti~ ~~ l'lopo:n)' L:lw S~~L~I!'
VIA FACSlMlLE
763-2954404
AND U.S. MAlL
RE: Monticello Housing and Redevelopment Authority '1/. Michaell. O'Connor, et at
Wright COUIlty District Court File No. C2.Q1-1924
Dear Dlhe:
Thl: appeal period has now passl:d III the:: abo"l: matter, without appt::U. The O\Wc:'I' has rcqL!ested
payment of the remaimng amount owed pursU3.tlt to the Award of Commissioners. The amount
remaining to be paid lS calculated as tollow:s:
Commissioners Award ofDanuges.
Appraisal Fee Reimbursement:
Total Principal:
$ 143,000.00
$ 500.00
$ 143,500.00
$ 92.200 00
$ 51,300.00
Qwck T4ke Dc:pOS1t:
Pnncipal Remaimllg Due:
Interest:
(On $50,800 from 9/27/01 to 2/27/02,
~tim~eddatcofpa~en0
2001 Int~est (96 days at 6%)
2002 Interest (58 days at 2%)
$ 801 66
S 161.'4
Total Amount D\.I.e As Of2/27/02:
(Plus $2.78 per day thereafter unul
date ot"payment)
$ 52,262 90
~.L..,II..ll.JOl+~1
MNI9/H9
-Co:rt.iiCl1 0,. M.M""Ilb. '5w.: a... ~"""IOl\lOn
.
.
.
OZ-IZ-02 15:ZZ
From-KENNEDY & GRAVEN
+3379310
Lrr to Olive Koropchak
Feb~ 12,2002
Page 2
T-775 P.03/03 F-7SS
Please arrange for lssuance of a check by the HOLCiing and Rede"elopment AL!thoriry paYJ.ble to
Michael I. O'Connor and his attomej', John T. Peterson, as their interests may appe3r, in the amol.1nt
of $52,162.90. When the check is :J.llailabh::, please scmd it to me for tr.msminal to Mr Peterson. At
that Wne, 1 will have hun si!P1 :J. receipt confirming receipt of the pa)'Itlent.
If you have any quesnons about this maner, please give me a call. Thank you.
v~n,
Rob~rt J. 1..indall
RJl:p~b
cc Dan GrCl:nswelg
Steve Bubul
RJL.2 LOOi.I4. 1
MN 190-8~
\ ~
. C H A
470 Pillsbury Center
200 South Sixth Street
Minncapolis MN 55402
(6J 2) 337-9300 telephone
(612) 337-9310 fax
hnr:/ /www.kennedy-graven.com
ROBERT J. LINDALL
Allollley at Law
Direct Dial (612) 337-9219
*Certified Rcal Propelty Law Specialist
February 21, 2002
Jolm T. Peterson, Esq.
Jolmson, Larson & Peterson, P.i\..
908 Commercial Drive
Buffalo, MN 55313
Re: Housing Redevelopment Authority in and for the City of Monticello v. Michael 1.
O'Connor, et al.; Wright County District Court File No. C2-01-1924
218 Front Street, Monticello, MN
Dear Mr. Peterson:
.
Enclosed herewith is check #68155 of the City of Monticello dated February 19, 2002, in the
amount of $52,262.90, which is payable to Michael 1. O'Connor and John T. Peterson, representing
the final payment of damages awarded in this matter, including interest and appraisal fees. I am
also enclosing a Receipt of Payment to be executed by you, to confirm receipt of the payment. You
are directed to not negotiate the check without executing the receipt and returning it to me.
If you have any questions about this matter, please let me know. Thank you for your cooperation
during the course of this matter.
RJL:peb
Enclosures
cc: Ollie Koropchak (w/enc.)
Dan Greensweig
.
RJL-2 I 0446vl
MN190~89
*Certitied by Minnesota State Bar Association
,.
MONTICELLO
CITY OF MONTICELLO
ACCOUNTS PAYABLE
505 WALNUT STREET · SUITE 1
MONTICEllO, MN 55362
763-295-2711
DATE
75" 1664
9iO
NO. 68155
MARQUETTo SANK - MONTICELLO. P.O. BOX ',29
MONTICEllO. MINNESOTA 55362' (763) 2SS.29S2
CHECK NO.
AMOUNT
.
2-19-2002
68155
$52.262.90
Fifty Two Thousand Two Hundred Sixty Two and 90/100 Dollars
PAY TO
THE
ORDER
OF
Michael I. O'Connor and John T. Peterson
r ,.- -"';.- :~Jr:f;?;Y:2>f;;;i~.;;::~'
I":::--':':':"':~ -'-~ :..'.'
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.... . ......... ') i: !A/1tr> (;<v..-.
L-.: :'.:::<: :0:::":'. :.:~::. ::::'.:.: .:::.:: '-:'.:.:.:/::: .:{:: :',:::-
1110 b B . 5 5 III I: 0 11 .0 . b b ... ? I:
? bOO O. ? III
(
"\
213.46583.5101
Court File # C2-01-1924
$52,262.90
.
.
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)
CITY OF MONTICElLO' MONTICELLO, MN 55362
NAGORSKI /
I APPRAISALS
1_-
'__;~';'r: "'.
,; ft~_. ...::::-;~f
,
)-" -' .
,_ . .'" t. '~'i_. _
21683 186th Street
Big Lake. MN 55309
(612) 263-3032
.
?- \ '?;> .
The following is
S <6''3 · '? \ ctc(
l:\v
'"}.- _' 0 ~
?-. '9-
~
the information regarding an Appraisal:
(IDE~~-I-l OR-)
Case Nwnber
District Court
Name
Property Address
218 Front Street
Monticello, MN. 55362
I
Michael OConnor
Fee
$200.00
Services for Housing & Redevelopment Authority
.
Mileage
Total
$200.00
Thank You
Sincerely,-//
~(~ '
Terry gor~
216 -186th. St.
Big Lake, MN. 55309
Soc. Sec. #471-56-9582
Please return copy of invoice with payment.
.
.
.~:~i:orth, Inc~
4725 Excelsior Boulevard
Suite #200
Minneapolis, MN 55416
February 4, 2002
INVOICE
Phone (952)929-0044
Fax (952) 929-0568
Toll Free 1-877-805-1575
'-\.\.0 -c; R"?> .2> \ q q
~"
Ollie Koropchak
Executive Director
Monticello Housing & Redevelopment Authority
Monticello City Hall
505 Walnut St., Suite 1
Monticello, MN 55326-8831
:>r<:!JO ~
~ ~v ~ C
1/
JANUARY SERVICES - MONTICELLO PROJECT
O'Connor
Talk with O'Connor's attorney regarding issues.
.
TOTAL HOURS EXPENDED
AT $70.00 PER HOUR
0.50
$35.00
I rrnYj rr.i1.: t:f"-_-~
1/;
, ' ,- i....
, - .
.";i i) '1.,\
.
ACQUISITION AND RELOCATION
.
.
.
HRA Agenda - 3/6/02
s.
Consideration of Executive Director's Report.
a) Xcel Energy - leUer of thanks and brochures mailed.
b) Lake Tool - F ollowup letter to HRA' s meeting.
c) Thank you to candidates who interviewed.
d) Gruber - Letter to clarify TIF District No. 1-22 "Four-year knock down rule".
e) Continue to work with owner of Roger's company. Ran TIF numbers f()r 6 acres and
60,000 sq n building. Suggqsled other financing options including Industrial Revcnqe
Bonds. May purchase Right Choice or construct west of TCDC. Working with a couple
of builders.
f) Local business looking to expand. Looking at 20,000 sq it building and on 2 acres.
Need to go visit.
g) BRE visit - 1 visited RemmeleEngineering, see attached.
h) Chadwick moving ahead - on Planning Agenda March 12 - conditional use permit and
concept stage development for PUD for multiple building business parle
i) new leads - Optometrist looking to construct and own professional building. About
6,000 sq ft, they would use 3,000 sq ft. Working with Greg Hayes, Shingobee.
An excavation company from Princeton looking for minimum of 2.5 acres and max of 5
acres. 15.000 sq ft shop and 3,000 sq tloffice. I [as outside storage.
j) Comp Plan public hearing date is Tuesday, March 12,2002,7:00 p.m.
Amoco site - I called Bob Esse who is on the MPCA Citizen's Board and informed hinl
of condemnation of site. Asked him to do some checking on the progress.
k) Council authorized appraisal for 70 acres of the Gold Nugget property.
February 15. 2002
MONTICELLO
Mr. Ken Stabler
Community & Economic Development
Xecl Energy
414 Nicollet Mall - G.0.5
Minneapolis. MN 55401
Dear Mr. Stabler:
.
The Marketing Subcommittee of the City of Monticello thanks Xcel Energy for its partnership
and contribution to\vard the latest publication of 2.000 brochures. The brochure markets the City
of Monticello t(W industrial and commercial development and is distributed in an aggressive
manner. Enclosed are copies ot"the new brochure. In partnership with the City of Monticello.
we encourage you to uti lize the brochure fl.1\" purposes of economic development. Should you
need additional brochures. please call me at 763-271-3208.
Again, thank you for partnering with the City of Monticello.
Sincerely.
CITY OF MONTICELLO
Ollie Koropchak
Director of Economic Development
CJ~ \~ VI '-12
c: File
.
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295A404
Oft1ce of Public Works, 909 Golf Course Rd., Monticello, MN 55362. (763) 295-3170. Fax: (763) 271-3272
February ~, 2002
1--1
MONTICELLO
Eric G. Bondlllls, Vice President
Lake Tool, Inc.
1347 Dundas Circle
Monticello. MN 55362
Re: HRA action of r:ebruary 6,2002, relative to tax increment deficiency per the Contract for Private
Development by and between T. .I. Martin, Inc. and the Housing and Redevelopmcnt Authority
in and for the City of Monticello, Minnesota datcd April I, 1997.
Dear Eric:
Thank you f'or attending the !-IRA meeting of February 6, 2002. to discuss a negotiable payment schedule
for the current tax increment deficiency.
.
The !-IRA commissioners agreed to three equal payments 01'$2,500 annually without interest for the
current estimated tax increment deficiency balance of $7,500. First payment due April 1,2002,
including evidence ofpaynlent of the delinquent property taxes. 'fhe second and third payments of
$2,500 are due April 1,2003, and April 1,2004. Delinquent tax increment deficiencies comll1cncing
from Taxes Payable 2002 and thereafter will accrue interest at a rate of 8.25%.
Please ,"emit the $2,500 and evidence of payment of the delinquent property taxes to the Monticello
Housing and Redevelopment Authority, Attn: Ollie Koropchak, 505 Walnut Street, Suite 1,
Monticello, MN 55362. Payment due date, April 1, 2002.
Thank you for consideration of this matter.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR TI IE CITY OF MON'fICELLO
~~~cl'0~~
011 ie Koropchak
Executive Director
c: Fill:
.
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3170 . Fax: (763) 271-3272
r:cbruary 12, 2002
MONTICELLO
Mr. 'rom Perrault
631 West Broadway
P.O. Box 1032
Monticello, MN 55362
Dear TOI11,
Thank you for applying fe)r the volunteer position as commissioner of the Housing and
Redevelopment Authority in and for the City or Monticello.
At the City Council meeting of February 11, 2002. the council supported the recommendation of
the HRA and approved the appointment of Bill Fair as commissioner of the lIRA.
.
The II RA appreciates your interest in local government and encourages you to \.-vatch for future
vacated positions.
Sincerely,
IIOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR '['HE CITY OF MONTICELLO
G~ \~~~~~
Ollie Koropchak
Executive Director
c: File
.
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-883 I . (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3170 · Fax: (763) 271.3272
..,
_.. , .. J
) ,
~
February 8. 2002
MONTICELLO
Doug Gruber
Wright County Auditor
Wright County G-overnment Center
10 Northwest 2 Street
Bufblo, MN 55313
Re: Follow-up 6'om Octoher 200 I meeting relative to four year "knock down" rule.
Dear MI'. Gruber:
As you recall at our mceting in Octoher 200 L you and I discussed certain parcels \vithin Block
54 and the ahility to re-instate parcels after demolition at the reduced market rate which \vould
increase the amount of tax increment. You were to check.
.
The week of Fehruary 4, 2002. you and I spoke via telephone about the parcels in Block 54 and
their application to the four year "knock down" rule. This letter re-affirms our discussion and
clarifies the parcels \vithin Block 54 in which qualifying activities occurred and will continue to
collect tax increment revenuc.
Parcel Number
Ori!2.inal Market Value
Original Tax Capacity
l55~0 1 0-054030
155-010-054060
155-0 I 0-054091
$] 98,600
$ 59,800
$ 52,900
$6,157
$ 598
$ 529
Attached is documcntation as proof of qualifying activity within Block 54 of Tax Incremcnt
Finance District No. 1-21. The four year "knock dmvn" rule commenced July I, ] 997 and ended
June 30, 2001,
Sometime after June 30. 2002, r plan to request reinstatement of certain parcels having heen
improved bt.:tvvcen the period ofJune 30, 200L to June 30, 2002.
.
Monticello City Hall, 505 Walnut Street, Suite I, Monticello, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3170' Fax: (763) 271-3272
.
.
.
Mr. Gruber
Fehruary 8. 2002
Page 2
Should you have any questions. please call me at 763-271-3208. Thanks for your assistance.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
\b~\<;,^~~
Ollie Koropchak
Executive Director
Attachments
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'I'IF REVENUES PROJECTED FOR DISTRICTS NO.5 AND 6.
Fund Balance 12/31/01. TfF District 5
$261.076
Annual tax increment estimated at $40,000 beginning 2002.
'fax increment 2001 - $77.990.
District decertifies 12/20] 2.
$440,000
No debt paymcnts
SURPLUS TAX INCREMENT FROM DISTRICT 5.
$701,076
********
Fund Balance 12/31/0 L TIF District 6
$ 133.90 1
Annual tax increment cstimated at $25.000 beginning 2002.
Tax increment 200 I - $46.578.
District decerti ties 12/ 1013
$300,000
Total balance and projected tax increment
$433,901
Annual Debt Service - $38.000 12/2008
$266,000
SURPLUS TAX INCREMENT FROM DISTRICT 6.
$167,901
TOTAL PROJECTED SURPLUS "TAX INCREMENT FROM 5 & 6.
$868,977
PROPOSED GOALS
1. The HRA take lead role the negotiation to acquire industrial land.
The HRA take lead role in development (infrastructure improvements) the industrial park.
Develop an economic development plan modeled after Big Lake including marketing
stratcgy.
2. Redevelopment projections: Front Street - best use of TIF Dist ] ~22 dollars.
Block 52, Walnut Street opening, parking ??
..,
.J.
Housing ~ scattered housing? Are there any areas of Monticello vvhich the HRA feels the
HRA needs to take the lead role in redevelopment?
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