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IDC Agenda 08-19-1999r 1 U AGENDA MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, August 19, 1999 - 7:00 a.m. City Hall MEMBERS: Chair Shelley Johnson, Vice Chair Tom Ollig, Don Smith, Kevin Doty, Tom Lindquist, Bill Tapper, Dick Van Allen, Ken Maus, Bob Mosford, and Marianna Khauv. COUNCIL LIAISON: Mayor Roger Belsaas. STAFF: Rick Wolfsteller, Jeff O'Neill, Fred Patch, and Ollie Koropchak. GUESTS: Heidi Pepper, Executive Director of the Economic Development Partnership of Wright County. Brenda Naffziger, President of the Monticello Area Chamber of Commerce. Call to Order. • t 2. Introduction and welcome of guests. 3. Consideration to approve the June 17 and July 15, 1999 IDC minutes. 4. Consideration of Updates: a) Mayor Belsaas - MOAA, community center, and Highway 25 and 75 projects. b) Koropchak -Prospects and BRE. 5. Consideration of follow-up discussion relating to the July meeting held between the Monticello Commerce Center property owner/broker and the IDC. 6. Continuation of an update on the Council action to actively pursue acquisition of the Chadwick/Goeman properties. a) City Budget Year 2000 in process -Discuss need to request dollars to support acquisition and need to solicit additional endorsement for acquisition from the IDC Lobby Committee, IiRA, EDA, Chamber Legislative Committee, etc. 7. Consideration of an update and to discuss guest speaker options for the Industrial Banquet in October 1999. 8. Continuation to discuss need to increase the membership of the IDC and direction thereafter. 9. Other Business. 10. Adjournment. • MINUTES MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, June 17, 1999 - 7:00 a.m. City Hall MEMBERS PRESENT: Chair Shelly Johnson, Tom Lindquist, Ken Maus, Dick Van Allen, Bob Mosford, and Jim Fleming. MEMBERS ABSENT: Vice Chair Tom Ollig, Don Smith, Kevin Doty, and Bill Tapper. COUNCIL LIAISON ABSENT: Mayor Roger Belsaas. STAFF PRESENT: Ollie Koropchak. Call to Order. Chair Johnson called the IDC meeting to order at 7:00 a.m. 2. Consideration to approve the May 20, 1999 IDC minutes. • Tom Lindquist made a motion to approve the May 20, 1999 IDC minutes. Shelly Johnson seconded the motion and with no corrections or additions, the minutes were approved as written. Consideration of Updates: a) City Council - In the absence of Mayor Belsaas, Koropchak reported the MOAA had met in early June with no resolutions to the Land Use Plan. A public hearing has been noticed for the July MOAA meeting. If land use issues are not resolved and the MOAA Agreement dies, the City Comprehensive Plan will be inconsistent with the Land Use Plan. b) Prospects - 200,000 sq ft building, 20 acres -The company president attended the Golf Luncheon and Outing. Looking to meet with property owner, contractor, or others to proceed with this project perhaps within the next few weeks. Via Administrator Wolfsteller, it appears the Commerce Center broker is stating the property owner is not interested in selling freeway property which is the desire of the company president. Mayor Belsaas will be asked to attend this meeting. 75/100 acres -This well-known name company looking for freeway exposure property has slowed-down their decision process for expansion plans. Have left messages for company update but no response. IDC Minutes - 6/17/99 100 + acres -Monticello remains in the running. Six community options going to second-level of company directors. Goeman/Chadwick parcel and Monticello Commerce Center are Monticello sites under consideration. The broker was not interested in the Gold Nugget parcel as his client does not want involved in a local political land use dispute or a land use which contradicts the recommendation of the city's professional planners. However, site preparation of the Goeman/Chadwick is more expensive than the Gold Nugget parcel. Die Cast Company -Two owners of the company and the site selection manager visited the Monticello Commerce Center site for a second time the early part of June. Shelly Johnson, Kevin Doty, Darrin Lahr, Mayor Belsaas, Lenny Kirscht, Rick Wolfsteller, and Ron Hoglund joined us for lunch at the Monte Club. Monticello remains in the running. The uses and sources statement was well received and Kirscht has followed-up on SBA qualifications and IRB availability. Manufacturer of refrigerator systems -Lead from NSP. No new information from company after submission of marketing information. 3,000 sq ft to lease -Looking for lease space for light assembly of in-house store displays. Mailed information and phone number of Barger and Morrell. Brochures - A little behind on sending out brochures. Brochures to be mailed to previous contacts of interest. Marketing -The bus tour was canceled for lack of positive responses of targeted audience. Conflict with date of EDAM conference. However, about 20 for lunch prior to golfing. Excellent networking. 14 golfers. Business retention -Mayor Belsaas will be visiting industries and Aroplax is looking to expand. 4. Consideration to discuss action taken by City Council relating to activel~pursuin~ to acquire the Chadwick/Goeman properties. Members were informed Council took action to actively pursue the acquisition of the Chadwick/Goeman properties and authorized city staff to begin preparation to acquire. The IDC request was supported by resolutions from the HRA and EDA. The Council took action with very little discussion. IDC members agreed to continue this item on the IDC agenda and to individually encourage Council members to proceed with acquisition. 5. Consideration to discuss the need to increase the membership of the IDC and direction • thereafter. 2 • IDC Minutes - 6/17/99 Mosford liked the subcommittee approach with less meetings as a whole. A few years ago, there was a lobbying, BRE, and marketing subcommittee. Prior to forming new subcommittees, first identify the objective of the subcommittee? A marketing subcommittee of HRA and IDC members does currently exist. Agenda items influence the turn-out at meetings. Others suggested periodic luncheon functions with special guests. Time can be an issue at noon but perhaps more convenient for out-of--town guests. To strictly increase membership with off-street individuals has no benefit, need to select members with connection to industrial development such as HRA or EDA members. If city staff unable to attend IDC meeting, they should designate an alternate. In lieu of the perceived reluctance of the broker to sell freeway exposed land, it was suggested to invite Charlie Pfeffer to an IDC meeting. Pfeffer being the broker, the IDC recommended Shawn Weinard, property owner, be invited to the July IDC meeting. Optional morning or noon. Increase of membership to be continued. 6. Consideration of follow-up on progress to solicit Governor Ventura as u~peaker for the Industrial Banquet. Chair Johnson informed members he knew people in the Governor's Office and he would be happy to try and solicit Governor Ventura as guest speaker of the banquet. Perhaps suggest some alternate dates for the Governor. Johnson will stop by Koropchak's office next week for contact to the Governor's office. 7. Other Business. None. 8. Adjournment. The IDC meeting adjourned by consensus. Adjournment at 8:00 a.m. ~~ ~~ Recorder n 3 i MINUTES MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, July 15, 1999 - 7:00 a.m. City Hall MEMBERS PRESENT: Vice Chair Tom Ollig, Don Smith, Ken Maus, Kevin Doty, Bill Tapper, and Bob Mosford. MEMBERS ABSENT: Chair Shelly Johnson, Tom Lindquist, Dick Van Allen, and Marianna Khauv. COUNCIL LIAISON PRESENT: Roger Carlson. EDA COMMISSIONER PRESENT: Ron Hoglund. STAFF PRESENT: Rick Wolfsteller and Ollie Koropchak. GUESTS: Shawn Weinard, owner of Monticello Commerce Center, and Charlie Pfeffer, Pfeffer Company, Inc. 1. Call to Order. Vice Chair Ollig called the IDC meeting to order at 7:00 a.m. In lieu of a change in the itinerary, all regular agenda items were tabled to the August IDC meeting. After welcoming the guests, each individual in attendance introduced themselves. The original purpose of the meeting was to discuss the purpose of the IDC and it's relationship to the Monticello Commerce Center and Market Place properties. As events changed, the more immediate purpose was to determine marketability of freeway exposure land and purchase price. Koropchak began by informing the group of the mission statement, purpose, and goals of the IDC as outlined in their 1999 Action Statement, and spoke of the Council's endorsement and dollars allocated for development of a marketing plan to promote industrial development for the City of Monticello including development of the new marketing brochure. Koropchak then outlined the background and process for recruiting Twin City Die Casting, Inc. to Monticello. Upon a call from Jay Eller, the City's marketing brochure and Pfeffer marketing brochure were mailed to Jay. Both pieces market the freeway property. Upon receiving, Jay came to Monticello and he and Koropchak toured the sites. The company was looking at about 10 communities. Johnson, Murray, Carlson, and r~ IDC Minutes - 7/15/99 Koropchak toured their existing facility in southeast Minneapolis. Jay, two of the business owners, Lenny Kirscht, and Mayor Belsaas visited the sites for a second time and members of the Prospect Team joined for lunch at the Monte Club. On July 2, Jay informed Koropchak that the City of Monticello was the selected and the company requested freeway exposed property. The selection was subject to the City producing. At a follow-up meeting on July 7 with Charlie Pfeffer, Dept of Trade & Economic personnel, Staff, and Twin City Die Casting; Twin City Die Casting was informed that the freeway exposed property was not on-the-market. Two alternative sites on the south side of Chelsea Road were presented as options. Charlie Pfeffer then made a presentation on the development the Monticello Commence Center and Monticello Market Place properties. He told of the partnership created with the school for the exchange or share of fill and pond development. Charlie described the Monticello Commerce Center as follows: 27.50 acres north of Chelsea Road as I-lA, another 14.50 acres north of Chelsea Road and most easterly as B2, and the remaining 66.93 acres lying south of Chelsea Road as I-lA. Private covenants exists such as irrigation to the street side, small utilities under-ground, grade level of building, and sometimes landscaping. Charlie informed the group the property lying to the north of Chelsea Road is not being marketed at this time. This is preserved as an investment and for ahigher-use development which will enhance the City's image. Charlie estimates Monticello's trunk fees at $8,130 per acre compared to about $4,600 per acre in Rogers. Charlie then turned to the number one site selection criteria for business development: labor. Ina 10-mile radius of Monticello, the age group is young, 1% minority, high school graduates above national average, occupations about 50% split between administrative and blue collar. Number of housing unit permits last year were 232 with an average selling price of new and existing homes at $114,892. Using an example: For a FHA mortgage of $130,000, 30 years, 7.75% interest rate, down payment of $7,755, would require a monthly payment of $1,158.59. Debt is usually the issue when applying for a mortgage. A community needs a mixed price-range of homes. Charlie informed members of the development activity in Maple Grove and Rogers and of their recent acquisition of another 100 acres in Rogers offthe freeway. In one year, prior to acquisition of the Monticello Commerce Center, they developed a grand total of 923,378 sq ft. In the last three years, they developed a total of 2 million sq ft. We know what we're doing. Selling price of land in Roger is $1.75 per sq ft and Maple Grove is $3.00 per sq. ft. It appears the process for development is easier in other areas stated Charlie. With the addition of roof-tops, business development will increase in Monticello. The demand for business development has not yet reached the City of Monticello states Pfeffer. 2 • IDC Minutes - 7/15/99 Shawn Weinard was frank with the IDC stating he's been yanked around by the City. Asked about consideration to se116-acres to Twin City Die Casting, he indicated the need to converse with Charlie privately. He and Charlie have not always agreed, but he has learned over time, Charlie knows his business. After the guests departed, IDC briefly summarized the meeting: Any property is for sale for a price. With no control of property, the City has no control of industrial development. The immediate issue: Twin City Die Casting. Then: The future. 2. Adjournment. The IDC meeting adjourned at 9:00 a.m. Recorder r FILE COPY July 27, 1999 Mr. Doug Harmon Vice President of Finance Twin City Die Casting Company 1070 33'~ Avenue SE Minneapolis, MN 55414 Deaz Doug: This letter is a follow-up to our telephone conversation of yesterday. The letter briefly explains the TIF process and level of TIF assistance offered by the City of Monticello to Twin City Die Casting. This assumes the construction of a 40,000 sq ft office, machining, and die casting facility on six acres of land and the creation of at least 50 full-time jobs within two years at hourly wages of at least $10 to $16 per hour excluding benefits. Based on an estimated mazket value of $28.44 per squaze foot for the building, the City of Monticello is prepazed to provide TIF assistance to Twin City Die Casting in an amount not to exceed $225,000. The TIF finance method is known as pay-as-you-go and is a reimbursement of a portion of your property taxes. Property taxes aze due and payable in May and October of each yeaz. Twin City Die Casting would remit•their property tax payment to Wright County. The City receives the tax increment from the County the following July and January, respectively. Based on the received tax increment, the City would reimburse Twin City Die Casting in semi-annual payments on August 1 and February 1 per the Development Contract between Twin City Die Casting and the City of Monticello. The reimbursement would occur over nine years at an interest rate of 7.5%, commencing from the first year tax increment is received. Eligible expenditures are land write-down and site improvements. Example: Assuming 6 acres at $35,000 equals $210,000 for land write-down and $15,000 for site improvements (curb, hard-surface, landscaping, etc.). Additionally, we discussed the City reducing the water, sanitary sewer, and storm sewer trunk fees in an amount not to exceed $40,000. This amount.would be deducted at the time the • building permit application fees are collected. Lastly, you requested an example of industrial property taxes in the City of Monticello. Attached are examples of taxes payable 1999 for some unidentified Monticello industries. 1~ Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245 • (612) 295-271 l • Fax: (6l2) 295-4404 MONTICELLO • Mr. Harmon July 27, 1999 Page 2 Should you have any questions, please do not hesitate to call me at 612-271-3208. We look forward to working with Twin City Die Casting on their expansion to the City of Monticello. Respectfiilly yours, C--cc--ITY OF MONTICELLO (~ nn Ollie Koropchak Economic Development Director Enclosure c: Mayor Roger Belsaas File a ATTAC~~fENT A Example A 52,000 sq ft tip-up panel office and manufacturing facility 10,000 sq ft stand alone metal warehouse facility 5 acres. Property taxes payable 1999 = $75,855. Example B. 53,000 sq ft tip-up panel office and manufacturing facility 5 acres. Property taxes payable 1999 = $69,943. Example C. 43,000 sq ft block office and manufacturing facility. 7 acres. Property taxes payable 1999 = $54,865. Example D. 49,000 sq ft tip-up panel office and manufacturing facility. 9.5 acres. Property taxes payable 1999 = $68,864. • • ii~- .., r`- i~i~~~~,~~~i~~~~~~i~ ~IV~~~~I • MEETING ITINERARY MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, July 15, 1999 - 7:00 a.m. City Hall MEMBERS: Chair Shelly Johnson, Vice Chair Tom Ollig, Don Smith, Ken Maus, Kevin Doty, Bill Tapper, Tom Lindquist, Bob Mosford, Dick Van Allen, and Marianna Khauv. COUNCIL LIAISON EDA LIAISON Roger Carlson Ron Hoglund STAFF: Rick Wolfsteller, Jeff O'Neill, Fred Patch, and Ollie Koropchak GUEST: Shawn Weinard and Charlie Pfeffer Original Purpose: To discuss the purpose of the IDC and it's relationship to the Monticello Commerce Center and Market Place properties. Immediate Purpose: To determine marketability of freeway exposure and purchases price. 1. Background of IDC purpose -Koropchak 2. Background of industrial project process and company request, Twin City Die Casting - Koropchak 3. Presentation by Charlie Pfeffer 4. Where we are at today. And where we are going tomorrow. Need to respond to Twin City Die Casting. :~