IDC Agenda 11-17-1994• AGENDA
IYIGI3TICELLv INDUSTRIAL DEVELGFMEIdT COTYiMITTEE
Thursday, Naveniber 17 , 1994 - 7 : OO a . ni .
City Hall
h1EMBERS : Ctiax'persaii Jvtin McGay, Vice C~~aix'persari f~evin Doty,
Treasurer Ran Haglund; Arve Gritnsina, Shelley Jokinsati, Dan
Sttii tiff, Jay Morrell , Ken Maus , Harv~:y Kendall , I~layor Bx'ad
Fyffe, Tam Lindquist, Iderrlyri SeefLldt, Steve Lerntr~e, Dr.
Glerui Netnec, Cyz'idie Jo~irrson, Sill Tapper, aria Jittt
Fletttitig.
STAFF: Rick Wolfsteller•, Jeff O'Neill, and Ollie Kax'apciiak.
GUEST: Charlie Ffeffer•, Pfeffer COMPANY, INC.
1. CALL TO ORDER.
2. CONSIDERATION TG APPROVE THE OCTOBER 2G, 1994 IDC I4IINUTES,
3. CGIdSIDERATIGN TO HEAR AND ACCEPT THE MONTHLY IDC FINANCIAL
REPORT.
4. CONSIDERATION GF PROSPECT UPDATES:
a} Fay-Mar• Fabricatar•s, Ir~c.
~;} fYlicra--Tech
a} Retail Services Carparatiori
d) i5G,GG0 sq ft distribution center
e} 15,GGG sq ft facility, 1G,GGG sq ft far lease
f } 5G, GOG sq ft ttlatiufactux'irtg/distributiati
g} 10,GOG sq ft leaseable space
fit MGS Machine Cax'poratioii
BRE P.EPGRTS
a} Septettiber, Totn Lindquist - Filigerliut Corporation
b) Navetrtber, Jitri Flettti2ig - SIYIM
Ollie Koropchak - Rettittiele Eliglieeririg
c) December, Dr. Tdernec - Araplax Corparatiar~
Decetttber, Cynde Johns~an - Bridge Water Teleprt.ane
d} ethers
5. CONSIDERATION TO ASSESS THE 1394 IDC BANQUET AND REVIEW ITS
REVENUES AND EXPENDITURES.
6. CONSIDERATION TG DISCUSS OBTAINING AN OUTSIDE FACILITATOR TG
ASSIST THE IDC WITH IDENTIFYING OBJECTIVES FGR A GNE-YEAR AI3D
FIVE--YEAR ECONOMIC DEVELOPMENT PLAN AS IT RELATES TO
MG23TICELLO ' 95 .
a) Date ctlld time (Januax'y IDC meeting, ttie 19tH. }
b) Wtiam invited .
Cunt lliited
• 7. COT3SIDERATION DF AN UPDATE REGARDING IFvDUSTRIAL
ZOTdIPdG i PLANNING ISSUES
a } Buf fer lscreen,/lazidscaping Y'eCllli x`~iiteilts
b j ~: ~ K ZCinnCJ, aiI-eTidirteTit acid atiiieXat~n
c} Amendment regulating pale buildicic~ constructioii
d} Suniiy Fresh request for a variance.
~} C/I sewer, water, arYd storm sewer access charge
f1 Lota 1; 2, and 3, Black i, OIF Second Addition
8. CONSIDERATION TO HEAR CHARLIE FFEFFER'S FRESENTATIOII,
9. OTHER BUSINESS.
a} Chamber Meeting, Today, Noon at the Aiiierican Legion Club,
Election of 1995 Officers.
b} Other
1 C . ADJOi7RNMENT .
a) Next IDC ineetirig, TTiursday, December 15, 1994.
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MINUTES
MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE
Thursday, October 20, 1394 - 7:00 a.m.
City Hall
MEMBERS PRESENT: Chairperson Jahn McVay, Treasurer Ron Hoglund,
Arve Grimsma, Don Smith, Jay Morrell, Harvey
Kendall, Tom Lindquist, Merx•lyn Seefeldt,
Steve Lemtne, Dr. Glenn Nemec, Cyr~die Jahnsan,
Bill Tapper; and Jim Fleming.
MEMBERS ABSENT: Vice Chairperson Kevin Daty, Shelley Jahnsan,
Mayor Brad Fyle, and Ken Maus.
STAFF PRESENT: Rick Walfsteller, Jeff O'Neill, acid Ollie
Koropchak.
1. CALL TO ORDER.
Chairper. s~on John McVay cal led the IDC ineetincg to ardor at ? : 00
a.rn.
2. CONSIDERATIGN TO APPRGVE THE SEPTEMBER 15, 1934 IDC h1INUTES.
Arve Grimsmo made a motion to approve the September 15, 1934
IDC minutes. Seconded by Bill Tapper and with no additians ar
corrections, the minutes were approved as written.
3. CONSIDERATION TO HEAR AND ACCEPT THE MONTHLY IDC FINANCIAL
REPORT,
Treasurer Hoglund reported a balance of $3,85n.53 at
Metropolitan Federal ar~d a balance of $2,257.46 at Marquette
Monticello for a total October balance of X6,114.07. Harvey
Kendall made a motion to accept the October IDC financial
report as given. Seconded by Cyndie Johnson and with na
additians ar corrections, the financial report was accepted
and filed.
4. CONSIDERATION OF FROSPECT UPDATES:
The printed prospect update was accepted by IDC members. Arve
Grimsma reported of his conversation with an official from a
Winsted industry regarding tY~e state-wide shortage o.f lobar.
additionally, he reported that approximately 42~ of a skilled-
wag~ emplaye4's ir~catne goes far benefits. The increased cast
of benefits t?takes it difficult for the small business hiring
non-skilled individuals to catrtpete therebye causing a greater
turnover. In additiarr to the labor shortage, Merrlyri Seefeldt
referred to the difficulty to finding, r~iririg, ar:d ratain.irig
jaineacie with high warl.~---ethic standards. h]r. Gritnsino suggested
Page 1
IDC MINUTES
GCTGBER 2G, 100=
the IDC address the labor shortage issue. In f:oropchak's
opinion, Monticello's best labor farce resource is tha yourig
people of this area acid our ability to work with the education
systerri.
BRE REPGRTS:
a) Keii Maus, Rainbow Enterprises, Inc., do report.
b) Tam Lindquist, Fingerhut Corporation, no x°eport.
c) Merrlyn Seefeldt, Electro Industries, reported of
reaching carnpany record sales. Ernployrnent is 50 or,-site
and 10 temps at home. Their largest state account is New
Hampshire ar~d they just picked-up Maine. The biggest
fall disappointuieiit was the expectation of the electric
fireplaces which may be due to the lack-of-know-haw to
market the product.
5. CGNSIDERATIGN GF ATJ ACCGUNTABILITY GF BANQUET TICKET SALES AND
BANQUET FGRMAT.
Koropcliak informed members of the BRE Subcommittee's
suggestions to assigr, seating at the banquet to t:r~courage
mixing, to add a short description of each industry to the
• printed program, and to insert a manufacturer's awareness
quiz. An accountability ~~f ticket sales was taken.
6. CGNSIDERATIGId GF AN UPDATE REGARDING ZONING PLANNING ISSUES:
a} In addition to the wx'itten updates, Jeff G'Ideill r°epo_rted
on the following:
1 } With the approval of ttie rezoning for 30--acres of the
Gladys Hoglund property fx'orn I-1 to PS, 205 acres of
industrial land remain.
c} Council will meet witYi the City Attorney to discuses
litigation ramification if Council denies the zoning of
the previously approved preliminary zoning concept for
ttie Emmerich/Klein property which complies with ttie
Corn~?reher~s i ve P lar~ .
3) A copy of the study completed by Northwest Associates
for the Sunny Fresh area is available to IDC rriernbers.
The study was authorized to determine the ultimate acid
bsst use of the property in the future. It i;~ pos:~:ible
that BN would exchange the T_,inn Street railrnad crossing
for anotr~er .
~ ~ IDC rnerr_tbers were presented with a copy of the bases
Fage c
IDC MINUTES
OCTOBER 20, 1334
residential sewer~'water hook up survey completed in
Octaber wit}i supplement Hates relating to cammercial and
a copy of the the commercial 'industrial s~:wer/water
access c}iar•ge compdrisans far existing Monticella,
Buffalo, RogNrs, Elk River, and proposed Monticello ~zsizig
Standard Iran, Aroplax, and Custom Canopy as examples.
Additionally, O'Neill hated reasalis far the propo<;ed
increases and suggested the IBC look at bath t}~e reality
and competitiveness. Caziunents by IDC members ranged Pram
vahat are the city objectives, Mor~ticella's greater
industrial competitors are Buffalo and Becker, the actual
one-time access increase charge would riot greater•ly
impact the reserve funds nor industries; however, more
importantly is the potential barrier• ar message of an
anti-business climate sent by the City to prospective
businesses.
Based on the IDG's objective of industrial business
recruitment, Bill Tapper made a motion recaznrr-ending t:ie
City Council deny an increase of the water and sewer
access charges as it relates to :industrial businesses;
however, if the Council duly felt an increase was
Iiecessary to limit t}'ie increase=' to are amount mat-ta-
exceed the industrial sewer and water access chargE~s of
tY~e City of Buffala. Mer•r•lyn Seefeldt seco:id t}ie inatiali.
Some members wore uncomfortable to veto on a motion
without having access to t}ie total project casts of
cnnstr~zctioli. If industries are required tc_7 install a
sprinkler system, d~jes t}iis require an enlarged pipe S.i~e
alld peIlaliZe the business? What is the comparative long--
term effect of higher access charges aiid lower rates tc>
industries? What is the total development casts adhering
to Moliticeilo'a requir•ettieiits far site irnpr•avezner,ts, pla3i
review, and permits and its camparisoti to at}ier
carnmur~ities? 4J}iat is a local industry's pro jetted
constz'uction cast compared to ita actual completed cost?
Sta-ff was directed to carnplote a comparative study of
development costs charged by Ut}ier cities aiid actual
development casts incurred by industries.
Karopc}-iak repeated the motion, Chairperson McVay called
far a vote . Yeas : E:ig}`it . Nays : Four ; Arve Gr.itnsmo, Dari
:,Ilrlt}-1, Tatn Lindquist , and Dr . Nemec . Thane voting in
favor o.f t}ie matioli felt the pra-business message ssnt by
the City of Moliti~ello to prospective industrial
businesses far-autweig}ied t}-ie small a,naulit of revenue
• anticipated from the propoaed industrial access c}urge
Page 3
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iDC P~iINUTES
GCTGBER LG, 1334
increases. Thoae voting iri o~aposition, felt the vote wa:~
pr'oit-ature ar~d opposed voting on ttie j;tatter ~i;iritil ir-ore
information was collected and presented. This ite~ii is
scheduled for• the City Council Agenda of GctobeY~ ~z.
7. GTHER BUSINESS:
U) The IDC acknowledged Charlie Pfeffer's request to appear
befox°e t}ie IDC and the IDC earmarked 15--;niriut~s of ttie
Noveni}~er 17 agenda to accommodate his request.
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8. ADJOURNMENT.
Torn Lindquist made a motion to adjourn ttie
Seconded by Jifn Fletnir~g grid without furt}ier
motion passed uriani~nously. Meeting adjourned
~lX~. ~ fly ~ry~ C~
Ollie Koropchak, IDC Executive: Director
IDC ~nee=tirig,
discussion t'ri~:
at 8:30 a.rn.
Forge ~
4. Corisidaratior~_ of Fros:~iect U~id«tes:
a) Fay-Mar Fabricatox'~, Inc. - TTia bark having recaived trio
as-builds, tide appraisal is in prograss. It is
anticipated by t1~ia land conveyance will occur' by Novetirber
21, 1gG~.
b) Micro Tech - Although the lease agraetiiant between
Mar•guatta Barik grid cornpariy officials has not bo~:n signed,
it appaars the 14 tole-salas persor~nal will occupy the
batik's sacond-floor• begirlriirig iri 3anuax'y.
c) Retail ^aervice Corporation - The IDC Prospect Team of
Hoglund, Kendall, tYicVay, Doty, and Koropchak were
scheduled to tour this company's existing facility in NE
Minneapolis ors November 8; however, « last niiriuta
cancellation by ttia company dalayad tYie tour. Tlia visit
tidy bean rescheduled for Tuesday, November 2G at :~:3G
a.tn. The conipany which rnanufacluras wooden retail-store
cabiriat5 and counter--tops is looking to construct 20,GOG-
25,GG0 sq ft f«cility alld projacts ernployrnarit of 30-40,
running two-shifts. Averages wages $12 to $13 per hour.
Elactrical user, lease axpires March, 19G5.
d) 150,GOG sg ft distribution center - This prospact fx'orii
Welsh Cornpariies raquasted a site cri feria proposal . Tlie
cornpariy is looking fox' approximately 15--acx'es to
«c;commoddte « 150,GOG sC1 ft }:iuilding expandable to
20G,GG0 sc1 ft. Frojectad ;jobs is 5G. Truck traffic, 25-
30 iri acid out daily. Narrowing of site salections, ttie
first of December. Sites rn«rketod iri Morit.icallo wax'a
Moritic:ello Cotiiinax'ce Celltax', Johri Lurldsteri, aria Tony
Etnrnaricti properties. Ttiariks to Charlie acid Jo~ir~ fox'
providing iriforrriatiorz regarding their respective sites.
a) I5,OGG sc~ ft facility, 10,G00 su ft fox' lease - This
conipariy was initially looking to construct a 4,OG0 sq fl
facility to accoriirnodate iris coriirnerci«I base form Spray
business ; however ; the ownar is now corisidax'irig i 5 , GGG
sq ft metal building utilizing 5,000 sq ft for tiffs owii
business grid leasing out 1G,000 sc1 ft. Has preliminary
concept approval fx'orri tsia bank aria looking at a financial
package of SBA; B«rik, and TIF. Anticipated Max'ch
GoriStruCt.iori. H1S bu.~lriass, four atnployees.
f) 50, 000 sq ft man~_ifdcturing%distribution - This lead from
Irivasttnarit Real Estate is requastirig I-2 uonirig to
accommodate a 50,000 sq ft building wit~i room fox'
expansion. The company manufactures steel piping.
Fr•operlas triarkated ware the HRA 6.4 acx'e silo. aria Jo~iri
Lur~dsteri'~ property. Thirty-plus jobs.
g) IO,OGO sq ft laasaable Space - Coritaciad by Realty World
Design. Refarx'ed to Elec:tro and Ffaffex''s buildings.
h} tY]GS Machine Corpox'atiori - Laad from Andy Andarson.
Manufacturer of packaging rnachiner'y. Good cornpariy, wall-
raii, ar~d growing, Fr•elitninary planning stagf_~: Flan to
lease ariottier facility ox' k:~uild. 0x11 irr t;i:raU inont~iS.
5. Cotisicieratian tc~ assess the 1394 IDC Ban uet ar~d review its
Revenues ar~d Expenditures.
I've received tr~ariy favorable cornrnarits regax'ding the speaker
and the likings of the assigned seating.
Great jab of calling tickets and a special thanks to the BRE
Subc:otntnittee: Totn Lindquist, John McVay, Bill Tappex', Steve
Letr~iae, Steve Bix'keland, Jr. , and Dr. Gletiri Nemec.
Enclosed is a list of tt-~~ 139 banquet participants and a
recap of the revenues and expenditures t~ date.
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1~~4 IDC BANQUET ATTENDANCE
DAHLHEIMER DISTRIBUTIGN
DGNATIGt $1GG
MARQUETTE BANK MGNTICELLG 4 $3Gv
FSI DGNATIGN $15G
BGNDHUS CGRPGRATIGN (BI 751 3 1r1S
FGSTER, FRANZEN & CARLSGN 2 $100
PETERSGN~`GRIMSMO FUNERAL CHAPEL 1 $75
BRGADWAY STUDIG (PAT SAWAT2KEj 2 $10G
GRUYS, BGRDEN, CARLSGN & ASSGC 2 $10G
iIdVESTGR TGGETHER, INC. 4 $2G0
'v'IC HELLMAN CGNSTRUCTIGN 2 $1GG
AMERICAN FAh1ILY ITJSURANCE 2 $1G0
CHAMBER GF CGh1itERCE ( B .~ ?51 3 ~^' S
HANAWALT 1 $25
BRIDGE WATER TELEFHGNE 3 $175
JGYNER LATJES, INC. DGIdATIGId $IGG
CARLSGN TRAVEL NETWGRK, INC. 2 $1G0
GLSGId & SvidS ELECTRIC 1 $75
JAMES & GRUBER 4 $20G
tdSr-MGNTICELLG "t $1GG
H-WINDGW CGhIFANY ( BI ~G ) 4 'x.50
WINKELMAN BUILDERS 2 $1GG
FIRST NATIGNAL BANK MGNTICELLG 4 $2GG
FINGERHUT CGRFGRATIGid 2 $iGG
PETERSGPt'S h10NTICELLO FGRD DGNATIGN $75
RAINBGW ENTERFRISES 4 $2GG
AUTGMATIC GARAGE DGGR CG DGNATIGN $75
HART CLItdIC 1 $75
hIONTICELLO-BIG LAKE HOSPITAL
vAUGH i1EIT AIJD COMPANY
MAUS FOODS
idSF-ST CLOUD
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STANDAP.D IRON « WIRE WORKS, INC.
METROPOLITAN FEDERAL
JONES MFG CO
M&P TRANSPORT, INC.
FLICKER'S Til & APPLIANCE
MOON MOTOR SALES, INC.
ARGPLAX CORPORATION
AME GROUP
JOHNSOi3'S DEPARTMENT STORE
ELECTRO INDUSTRIES
MEGA PRODUCTS, INC.
GENEREUX FINE WOOD PRODUCTS, INC.
MONTE CLUB
NATIONAL BUSHING
SUNNY FRESH FOODS, INC.
MONTICELLO TIMES
ECM PUBLISHER
i~10NTICELLO OFFICE PRODUCTS
COAST TO COAST
DAtiID'S PHOTOGRAPHY
GOULD BROTHERS
FAB CON
4
4
L
5
DONATION
4
1
DONATION
2
2
DONATIGN
3
2
2
2
2
5
2
1
2
DONATION
1
1
1
DONATION
2
DONATION
2
$20G
$225
$100
$3G0
$1G0
$3GG
$75
$1GG
$100
$100
$75
$225
$100
$1Gv
$100
$10G
$275
$100
$75
$1Gv
$100
$75
$lOv
$75
$?5
$10G
$lvv
$1Gv
BEN SMITH 1 $75
BRAD FYLE
1 S75
GENE FYLE DGNATIGN $75
GSM 3 $225
PUBLIC RESGURCE GRGUF 4 $250
PAUL WEINGARDEN DGNATIGN $75
VALUE PLUS HGMES 2 $1GG
CUSTGM CANGFY, INC. 2 $1GG
PFEFFER CGMPANY, INC. 1 $75
DGNATIGN) $75
MINNEGASCG 2 $lOG
GERRY WENNER {BILL-$75) 1
1 $25
HAROLD FITTMAN DGNATIGN $IGG
CITY OF MGNTICELLO 4 $3GG
DIANE ANDERSGN 1 $25
KIM G'NEILL 1 $25
RESIDENTIAL DEVELGPMENT, INC. DGNATIGN $1G0
GCELLO, INC. 2 $15G
NIINNESGTA BUSINESS FIFJANCE 2 $15G
ECGNOMIC DEVELGPMENT PARTNERSHIP 1 $1GG
GF WRIGHT CGUIJTY
CHARLIE HERRMANN GRATIS
RGY SCHULZ GRATIS
GLLIE KGRGFCHAK GRATIS
139
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1994 IDC BANQUET FINANCIAL REPORT
October 26, 1993
OCTOBER 25, 1994
REVENUE:
112 PAID MEAL TICKETS
(BILLED]
13 GRATIS TICKETS
35 DONATIONS
TOTAL ANTICIPATED REVENUE
TOTAL DEPOSIT
EXPENDITURES:
MONTE CLUB
78 STEAKS ~~ $13.95
37 WALLEYE PIKE tW $12.95
10 CHICKEN BREAST a $8.95
TAX
125 HORS D'QUERVRES ~ $1.50
GRATUITY
TOTAL MONTE CLUB
MONTICELLO PRINTING
MONTICELLO OFFICE PRODUCTS
LITTLE MOUNTAIN FLOWERS
HONORARIUM
TOTAL EXPENDITURES
BANQUET PROFIT
=~ ANTICIPATED PROFIT
$6,500 125 $7,225
11 $ 675
3
2 1O0 16 1 475
$8,600 139 $9,375
$8,700
$1,088.10 70 $ 976.50
$ 479.15 51 $ 660.45
$ 89.50 18 $ 161.10
$ 1G7.69 $ 116.85
$ 187.50 139 $ 208.50
$ 248.06 $ 269.60
$2,200.00 $2, 393.00
$ 4G.04 $ 39.94
$ 9.44
$ 6.39
$ 100.00
$2,355.87 $2, 432.94
$6,244.13 $6, 267.06
1994 PROPOSED IDC BUDGET
BANQUET REVENUE
BANQUET EXPENDITURE
BAi3QUET PROFIT
$6,942.06
$8,500
$2,750
$5,750
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MOtdTE CLUB
8932 Penning Ave. N.E.
P.O. Box 1240
Monticel{o, MN 55362
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DATE
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AMOUNT ENCLOSED
PLEASE DETACH AND RETURN UPPER PORTION WITH YOUR REMITTANCE.
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CHARLIE HERRMANN
Phone: (507) 455-6226
October 27, 1994
Ms. Ollie Koropchak
Economic Development Director
Monticello
250 East Broadway
P.O. Box 1147
Monticello, MN 55362-9245
Dear Ollie:
You are even more impressive in person than you are on the telephone,
or on paper - -gotta believe that you will someday fill up the Monticello
Industrial Park all by yourself if enough people get an invitation
to move to town from Ollie Koropchak.
Thoroughly enjoyed the banquet with you and your compatriots - -
the dinner and speaking surroundings were unique from my standpoint - -
almost made me feel like a night club entertainer.
1 had some very nice comments from people in the audience - -there
• were several that I would have liked to take with me to the next
speaking occasion just because of their attentiveness, responsiveness,
laughter, etc.
As you plan your banquet for a year from now, let me recommend
to you, with as much fervor as I can, that you consider using a
guy by the name of Dr. David Landswerk as your speaker.
Dave is younger than I am, much more handsome, has better numbers
on the I.Q. scale, etc. He was our Superintendent of Schools in
Owatonna for a number of years and then completed his career as
Superintendent in Wayzata.
David does a lot of speaking and I'd guess that you could get him
for $1,000.
His home address is 3050 Holly Lane, Plymouth, MN 55447, and
his phone number is (612) 473-7148. If you keep a file of people
that might be program candidates for you, let David send you a
little material, or at least have a visit with him on the phone.
n
POST OFFICE BOX 463 • OWAIONNA, MN 55060
Ms. Ollie Koropchak
October 27; 1994
Page two
The next time the Finns in our famil et to ether for a reunion
Y Y 9 g
I'll expect an invitation so I can schmooze with the group.
My best wishes for your continued success.
Cordially;~~
~~
L~
Charlie Herrmann
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1 CaI1SlderatlaYl of a!1 Update x'e' ax'dillg I2ldustx'ial
~aI11I1c~j Pld2i211i1t,~, Iasues
~) EU.ffer%SCY`eCil/`lallaSCaplI1CJ, x'ec;fLlix'elrielltS - A"t tie NcaVeiit~er
PIax1Ii12ig COirItr1lS:~ial1 irieeti2ig trip teiil was tabled. Roy
Scliulz, President of Palycast Specialties, Inc., called
r•egax'di2ig liis u2iliappir~ess with the appr•ovad sriult.i and
single residential zo21i2ig to the south of his new
developinelit. Pex' advise fx'ain tiie City Eligineex', the
coitipa2iy redesigr2ed their site and building location to
aCi_;U1T1(riadate the starirl S.yWer drai2lage Y'equix'eirlcntS alid the
suggested location of the pond to the soutlierIl pax't of
tlieix' ic3t. Willi satisfyi2ig the suggested polid location,
tY~e campariy's liability liar increased witli the approved
zanrig . CYlx' . Scliulz suggests i f a bex'itt is cria led, i t
must be steep a_ri.d inclusive of a fence to x'educe the risk
far:tar .
b) E & K Zo2lirig -- Tlie Zoning Grdinarace Allieildiite2ltS and the
Prelirr-ir~ary Plat fax' the Klein Farlrl Subdivision was
approved by tl"ie City Cour~ci l on Gc lobar 2~ , i39~ .
c) Hrne2idir-elit regulating pale building canstructiali -- Tabled
by Plan2lirlg Caiiiinissian.
d j Su2ir~y Fresh request fax' var'.iatice -- Sun2iy Fresli w tlidx'ew
tlieix' x'equeSt arld T1aw ax'e pax'tlclpat121g 121 ci Sall
investigatiar~ of the West ~ Street a2id Locust Street
areas.
e) C/'I Sewer, water, and stox'nl sewer access cllax'ge - At the
Noveriibex' 14 City Caur~cil, ineriibers appx'c~ved the enclassd
Building Fees as proposed, effective January, 195, Tl1e
storin sewer access cliarge is still urider• investigatia2i by
Attorney Paul Weillgarden arld will be approved separately.
If it is fa~und that the increased fees prohibit
industrial development, tl-~e Caunc:il will raca2lsider the
industrial fees.
f) Lats 1 , 2 , and 3 , Black 1 , GIP Second Additio2i - Tlie City
Council oU215idex'ad the four enclosed alternatives as
presented by Rick Walfsteller. As the City has heard no
response fx'oirl the H-Wi2idaw Coirlpany, the Couiic.il'S
consensus was to place the three lots are the open ir~arket .
I, iiiyself, am aware Uf two pax'ties i2itex'ested iri the city
lots.
•
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SEWER & WATER HOOK UP SURVEY
OCTOBER, 1994
BASE RESIDENTIAL FEES
GallonsJDay
City Water Sewer Unit Basis
Monticello 300 + Meter 300 250
Big Lake 375 + Meter 400 Currently considering
increase & formulas
Buffalo 500 1,000 164
Elk River 1,000 1,300 274
Hutchinson 500 500 Working on formulas
& increases
Rogers 400 1,300* 274
* Note: $300 Base + $1,000 Waste Water Expansion Fee
RESIDENTIAL NOTES:
A. Buffalo, Elk River and Rogers charge 80% sewer access charge for
apartment units and 75% for subsidized apartments.
B. Monticello charges 75% for multiple apartment units.
COMMERCIAL NOTES:
A. Buffalo reduces sewer access charge by 50% after two units and 80% after
eight units.
B. Elk River uses the metro table based upon 274 GPD (per unit) x $1,300 per
unit.
C. Rogers increases residential base WAC & SAC charges by 100% for
commercial and uses 274 GPD (per unit) SAC (e.g., $300 x 2 = $600 +
$1,000 = $1,600 for each unit).
D. Monticello uses 250 GPD (per unit) x $300 per unit for commercial and
industrial.
DEFINITIONS:
WAC=Water access charge
SAC=Sewer access chagge
GPD=Gallons per day
•
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•
/6
Council Agenda - 11/14/94
11. Consideration of entering into an agreement with H-Window
Company concerning future acquisition of Lots 1, 2 and 3, Block
1, Oakwood Industrial Parks Second Addition (R.W.)
A. REFERENCE AND BACKGROUND
In June of 1991, the Council adopted a resolution agreeing to hold all six
(6) lots of the Oakwood Industrial Park Second Addition for the H-
WindowCompany's future expansion potential. This agreement expired
December 31, 1992, and in February of 1993, it appeared that the H-
Window Company would be making a decision on whether to purchase
the property by June 1 of 1993. In light of this time table, the Council
then adopted a resolution agreeing to hold lots 1, 2, and 3 (the lots
closest to H-Window Company) until May 31, 1993, and to also provide
a first right of refusal for Lots 4, 5, and 6 for the same time period.
Lots 4, 5 and 6 were those lots on the east side of the cul-de-sac. When
the June deadline came and went without H-Window Company
purchasing any of the property, the City Council again agreed in August
of 1993 to hold Lots 1, 2, and 3, Block 1, for an additional time period
expiring January 31, 1994, and to again provide a first right of refusal
for the other three (3) lots until January, 1994.
No further extensions were requested by H-Window Company, nor did •
the Council review this subject until the City staff had received an offer
for the purchase of Lot 4 in the amount of $36,000 from Miley Gjertsen
for his underground sprinkler irrigation business facility. At that time
it came to our attention that the previous right of first refusal
agreements with H-Window Company had expired in January, but the
staff felt that we owed H-Window Company the opportunity to exercise
their right of first refusal anyway. The City Council agreed with this
assumption and allowed H-Window Company the opportunity to match
the offer if they so desired.
After considering the feasibility of matching the purchase offer, Mr.
Steve Lemme, President of H-Window Company, indicated that the
company would not be in a position to purchase Lot 4 at this time.
However, Mr. Lemme did note that H-Window Company executives were
very concerned about being able to ensure the availability of Lots 1, 2,
and 3 on the west side of the cul-de-sac for their future expansion needs.
Mr. Lemme noted that if these three lots were not available in the
future, it could have an effect on their future expansion plans for H-
Window Company at that site. When I indicated that I was confident
that the City of Monticello would make every attempt to allow these lots
to be purchased at reasonable terms by H-Window Company, •
16
Council Agenda - 11/14/94
. Mr. Lemme did not want to commit to an immediate purchase of the
property but would like to see the City continuing to hold the property
in some manner for H-Window Company expansion potential.
When the City Council accepted the offer for the sale of Lot 4 to Mr.
Gjertsen, the Council asked that some options be presented at a future
Council meeting and what the Council would consider regarding H-
Window Company's interest in Lots 1, 2, and 3. The previous Council
discussion centered on whether the City could continue to provide H-
Window Company with a no cost option agreement when there were
other industrial business that would like the same treatment. As a
matter of fact, the City was recently contacted by another existing small
industrial company that sees the need for expansion in the next couple
of years and is interested in purchasing one of these lots from the City.
Likewise, they would prefer to have the City hold the property until
they are ready to expand, as they do have cash flow problems.
Continuing to hold the property for one business may be a precedent
that the Council will have to deal with in the future concerning other
businesses.
I recently informed H-Window Company of four possible alternatives the
ouncil would be considering. The options are as follows:
1) The Council could enter into an option agreement with H-Window
Company on the sale of Lots 1, 2, and 3 at the current asking
price of $17,500 per acre or $79,350 with the annual option fee to
be calculated at 6% per year, or at whatever percentage rate the
Council was agreeable with. A 6% fee would amount to an
annual option charge of $4,761 per year, which would hold the
three lots in question at the established price of $79,350 until
such time as H-Window Company would desire to complete the
purchase.
2) The Council could establish an option agreement with the annual
fee noted in Item 1 above, and also request an additional annual
fee to cover the estimated property taxes that would be lost until
the sale occurred. Based on current county assessed market
values for these three (3) lots, the annual real estate taxes
payable would be estimated at $1,150, which would increase the
total operation cost to H-Window Company to approximately
$5,911.
•
17
Council Agenda - 11/14/94
3) The Council could offer to sell the property to H-Window
Company at attractive terms such as no down payment, 20 year
contract for deed at 6% interest, etc. This type of low cost
arrangement would probably be more favorable than the City
would consider for selling the property to other interested
properties, but would allow H-Window Company the ability to
minimize their cash investment at this time. The favorable terms
would certainly be appropriate in this case, as we would be
providing the terms to a business for potential expansion and
would not likely offer the same as no down payment, long-term
contract if we were just selling the property to a speculative
buyer.
4) Council could decide to continue with the right of first refusal on
all three lots and direct the staff to continue marketing efforts to
sell the property to other industrial users. Under this option, H-
Window Company would still have the right of first refusal but
they could very well be faced with making a decision on the
purchase of one or all of the lots in a very short period of time.
I presented the four options that I thought the Council may want to
consider to Mr. Lemme for his review and response. At this time, I have
not received any firm preference from H-Window Company concerning
the options other than their desire to work out something with the City
to continue to make these lots available, nor was it indicated that if they
were not available when needed, they may have to look at other sites.
One of the possible disadvantages for H-Window Company in an
outright purchase of the property at this time concerns the use of tax
increment financing in the future. If H-Window Company owns the
property now, it would not be eligible for tax increment financing when
it did expand in the future. That is not to say that tax increment
financing will even be available years down the road, but it would
probably eliminate this incentive from being usable at that time.
From the City's standpoint, I would think that either the establishment
of an option fee or the outright sale under favorable long-term contract
for deed terms should be acceptable to us. Continuing to hold the
property without any option fee will likely be construed by other
industrial businesses as playing favoritism to one business and others
may ask for the same treatment. As I noted earlier, another small
company looking for expansion in the next couple years has already
requested the same treatment for one of these lots. No matter what the
option fee is, I believe the past history of providing the option guarantee
at no additional cost should be eliminated and some other method of
~s
Council Agenda - 11/14/94
assuring H-Window Company's ability to acquire these lots be
established.
`tr
B. ALTERNATIVE ACTION
1) Council could agree to enter into an option agreement with H-
Window Company on Lots 1, 2, and 3 at the current asking price
of $79,350 with the annual option fee to be established at
whatever percentage rate the Council is comfortable with.
2) Enter into an option agreement similar to that proposed in
Option 1, but also require an additional $1,150 to cover the
estimated real estate taxes that would be lost by not being owned
by H-Window Company.
3) Council could offer to sell the property to H-Window Company at
attractive terms such as no down payment, 20-year contract for
deed at a low interest rate, etc.
4) Council could continue with the right of first refusal agreement
on all three (3) lots but direct the staff to continue marketing
efforts to sell the property in the meantime.
C. STAFF RECOMMENDATION
While the staff believes it is important to encourage availability of land
for future expansion by current industries, the staff does have concerns
on continuing to hold property for one industry when we may not be
able to do the same for others. I do feel if H-Window Company is
concerned about having enough land available for their future needs,
they do need to make some effort themselves to protect their interest;
and as a result, I feel they should enter into an option agreement and
pay an annual fee or accept the purchase at favorable terms provided by
the City. I had previously asked Mr. Steve Lemme to present any other
ideas he had for Council consideration regarding these lots, and it is
possible he may have some other suggestions at the Council meeting for
your review. It was noted by the Industrial Development Committee
that they hoped the City and H-Window Company could work out an
agreement that was favorable to both parties, but they did not support
the continued holding of the property at no cost.
D. SUPPORTING DATA
Copy of an option agreement; Copy of a right of first refusal agreement.
19