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HRA Minutes 11-03-2004 MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, November 3, 2004 - 6:00 p.m. 505 Walnut Street -Bridge Room Commissioners Present: Chair Bill Fair, Vice Chair Darrin Lahr, Dan Frie, and Steve Andrews Commissioners Absent: Brad Barger, City Council Liaison Roger Carlson. Staff Present: Rick Wolfsteller, Ollie Koropchak, and Angela Schumann. Call to Order. Chairman Fair called the meeting to order at 6:00 PM, and declared a quorum, noting the absence of Commissioner Barger. 2. Consideration to approve the November 3rd 2004 HRA minutes MOTION BY COMMISSIONER FRIE TO APPROVE THE MINUTES OF NOVEMBER 3rd, 2004. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED. • Consideration of adding or removing items from the a enda NONE. 4. Consent A eg nda. NONE. 5. Consideration to review revisions to the Monticello Transformation Home Loan Application Package and authorize commencement of program January 1 2005 Koropchak reviewed the changes made to the program draft materials for the program since the last meeting. Those changes were made after a meeting with Mark Ruff and Steve Bubul. Koropchak reported that it was confirmed at that meeting that the funds had to be used for redevelopment in structurally substandard homes. Bubul also recommended adding criteria defining "structurally substandard". Koropchak stated that ideally, the remodeling and design advisor service would be combined with redevelopment test. Koropchak had spoken with the inspector that Bubul had recommended. He had indicated that he could train City Building Officials on the redevelopment inspections. • Koropchak reported that both Bubul and Ruff suggested that the transformation loans be payble upon the sale of property or forgiven after ten years, noting the investment and the goal of long term stability. Fair noted that the shorter term for loan forgiveness was intended as an incentive to participate in the program. He pointed out that if a homeowner makes such a significant investment, it is unlikely that at sale, the property would turn into a rental. He suggested that perhaps the HRA could prorate pay-back between five and ten years. Fair explained that the lenders had also thought that five years would be an incentive. The Commissioners discussed a timeframe for forgiveness, directing Koropchak to adjust the guidelines to forgive in 7 years with no pro-ration. If the property is sold within that time, the loan will be required to be paid back in full. Koropchak reviewed other changes, noting that she would be working with the Building Department to fine tune other areas. Fair asked if the loan recipients deviate from the loan criteria, would they have the opportunity to come to the HRA for an appeal of the variations. Koropchak stated that would be something the HRA could consider at the point that it becomes an issue. Fair questioned the sweat equity clause. Koropchak stated that she needed clarification of that item. Fair stated that lenders will accept sweat equity as part of down payment on atypical home loan. Wolfsteller and Frie stated that the easiest method for allowing sweat equity is to allow the bank to handle it through the loan process, thereby distinguishing between value and cost. Wolfsteller indicated that the HRA transformation loan should be based on what the applicant borrows. The sweat equity can be used in how the applicant gets to the base qualifying amount. The Commission directed Koropchak to add the clause "Sweat equity can be used for eligibility when verified by a certified appraisal at applicant's expense." Koropchak noted that loan amounts will be public data according to state statutes. However, as the lender will complete the credit analysis, the HRA and public will not have access to that information. Lahr asked if there are any remedies if the loan recipient doesn't pay the loan back if the home is sold within 7 years. Fair indicated that the note and mortgage against the property would act as the remedy. If the property is sold, the closer has to disburse back to the City. Koropchak also noted that the 7 years expires at the date of last disbursement. Fair stated at the next HRA meeting the Commissioners and Koropchak will determine how to market the program. • MOTION BY COMMISSIONER ANDREWS TO AUTHORIZE COMMENCEMENT OF THE PROGRAM .IANUARY 1, 2005, AND TO REQUEST FINAL DRAFT OF DOCUMENTS AT THE HRA MEETING OF DECEMBER 1, 2004. MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED. 6a) Consideration to review revisions and accept the Performance Measure for the Otter Creek Business Campus. Koropchak explained that she is looking for direction from the HRA on finalizing the Performance Measures due to the HRA's commitment $400,000 to the Otter Creek Business Campus. Koropchak outlined the performance measures for the HRA, noting that she had reviewed them with Steve Bubul and Mark Ruff. Koropchak specifically cited the minimum lot size at 2.5 acres, noting that if lots are too small, the Business Park may need additional infrastructure. Lahr asked what the current plan for infrastructure is based on. Koropchak stated that it is based on what was outlined in the sketch, which relies on Chelsea, School and Haul as primary access points. Lahr noted that all land is available at any size, it will just be a matter if a business wants and can qualify for the discounted price. Koropchak asked the HRA whether they even wanted to sell land at market value, noting that with smaller lots, they would have to pay for the additional infrastructure. Andrews asked how attractive building sites would be at 2.5 acres. Frie stated that in some areas there are smaller lots. However, in most cases and in Monticello's competitive bracket, the 2.5 acre lots are fairly consistent. Andrews indicated his desire that Monticello stay consistent with competitors. Frie asked if a 27,000 square foot building requirement might be too large for an office complex, if the City will be marketing the areas as a business park. Koropchak noted that an office building would also need more parking. Frie explained that he doesn't want to lose an attractive market by being too severe is measurement goals. Lahr asked if there was a way to weight criteria or trade-off. For example, if a business creates more job or higher wages, the square footage requirement is lessened. Koropchak explained that if an office user selects Otter Creek as a site, no TIF is available, and in turn, the opportunity to purchase less acreage is available. The performance measure as outlined just specified that if a buyer wants the reduced rate, the minimum size lot is 2.5 acres. Koropchak reviewed the other measures, including wages. Lahr asked Koropchak if most potential candidates would fit the criteria as outlined. Koropchak stated that they are in this general range. • Lahr asked if there was a way to simplify the criteria for users. Koropchak stated she would put a very simple questionnaire together for them, then complete the calculations based on the worksheet. Koropchak noted that the performance measures would be presented to the Council perhaps at the December meeting. The covenants and zoning had to go through the Planning Commission and then on to Council. MOTION BY COMMISSIONER ANDREWS TO ACCEPT THE PERFORMANCE MEASURE FOR OTTER CREEK BUSINESS CAMPUS AS WRITTEN. MOTION SECONDED BY FRIE. MOTION CARRIED. 6b. Consideration and approval of zoning for Otter Creek Business Campus for recommendation to Planning and Council. Koropchak reported that the Planning Commission had called for a public hearing regarding the rezoning for December meeting. Koropchak requested that the HRA make a recommendation on the zoning to the Planning Commission after briefly reviewing the differences between the outlined zoning designations. MOTION BY COMMISSIONER LAHR TO APPROVE THE RECOMMENDATION OF AN II-A ZONING FOR OTTER CREEK BUSINESS CAMPUS. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED. 6c. Consideration and approval of covenants for Otter Creek Business Campus for recommendation to Planning and Council. Koropchak stated that the Small Group had supported I 1-A zoning, however, they had not decided specifically on which covenants. The Small Group was supportive of covenants for Otter Creek in general. Koropchak explained that City Planner Steve Grittman has attended the IDC meeting. He will be working on clarifying the ordinance and potential covenants related to Open and Outdoor storage. Koropchak noted that the I1-A district currently allows open and outdoor storage by CUP. The IDC sent the covenant discussion back to the Small Group. Koropchak reported to the HRA that she had researched Becker, Big Lake, Rogers, and other surrounding communities in terms of covenants, and particularly open and outdoor storage. The majority do not allow outdoor storage. Koropchak indicated that there is a grey area on warehousing and distribution in the new industrial/business parks. • MOTION BY COMMISSIONER LAHR TO APPROVE THE RECOMMENDATION TO DRAFT COVENANTS FOR OTTER CREEK BUSINESS CAMPUS (I1-A ZONE) ACCORDINGLY AS RECOMMENDED BY STAFF: a) Landscaping - b) Outdoor/Open Storage c) Irrigation - d) Exterior building material type - e) Other MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED. 7. Consideration to authorize payment of HRA bills. MOTION BY COMMISSIONER FRIE TO AUTHORIZE PAYMENT OF HRA BILLS. MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED. 8. Consideration of Executive Director's Report. Koropchak reported that she had inquiries from real estate developers looking for a 55,000 square foot building with no outdoor storage. Lahr recommended that when developing marketing materials for Otter Creek Business Park, the term "preferred", rather than "performance" should be considered. 9. Committee Reports. NONE. 10. Other Business. NONE. 11. Adjournment. MOTION BY COMMISSIONER FRIE TO ADJOURN. MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED. Chairman 5 Secretary