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HRA Minutes 04-11-2007• MINUTES HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, April 11, 2007 Commissioners Present: Vice Chair Steve Andrews, Bill Fair and Dan Frie Commissioners Absent: Chair Brad Barger, Darrin Lahr Staff Present: Ollie Koropchak, Angela Schumann, Rick Wolfsteller 1. Call to Order. Vice Chairman Andrews called the meeting to order and declared a quorum, noting the absence of commissioners Barger and Lahr. 2. Consideration to approve the February 7, 2007 minutes. MOTION BY COMMISSIONER FRIE TO APPROVE THE MINUTES OF FEBRUARY 7TH, 2007. • MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 3 YEYS - 0 NEYS. 3. Consideration of adding or removing items from the a eg nda. NONE. 4. Consent A eg nda a. Consideration to approve the Certificate of Completion for SL Real Estate Holdings, LLC dba Karlsburger Foods. Koropchak noted that she has a call in to Kennedy and Graven about charges that are not related to the Karlsburger site. She indicated that the invoiced amount was for $17,055.56, but that there is a $688 that should be removed. Koropchak also noted that Karlsburger has not provided the invoice to pay for grading. MOTION BY COMMISSIONER FAIR TO APPROVE THE CERTIFICATE OF COMPLETION FOR SL REAL ESTATE HOLDINGS, LLC. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED, 3 YEYS - 0 NEYS. • 4.5 Consideration of a presentation on the Cedar Street Garden Center propert~by Zach Adams, Wright-Sherburne Realty Zach Adams, representative of Wright Sherburne Realty, addressed the HRA representing Leslie Delise, Cedar Street Garden Center. Delise is seeking to sell the land and buildings, although the value is essentially in the land. Adams noted that the Garden Center parcel is the largest contiguous piece in the downtown at 1.2 acres. Adams stated that it is the client's intent to propose the HRA purchase the property as a redevelopment opportunity. Adams stated that he had spoken with Allied properties in terms of a possible project on their block. Allied had indicated that the timing wasn't right for their project due to monetary and parking concerns. Adams suggested that if the City could acquire the garden center property, it could be used to alleviate those issues for the Allied project. Adams reported that Allied couldn't purchase the property, but had indicated that they believes that when the time comes, they will be able to put something together. In summary, Adams stated that they are offering it to the HRA for purchase for parking. He indicated that it is listed at $459,900, for a per square foot cost of less than $9.53. Fair asked Delise if she would open this year. Delise confirmed. Andrews asked • how long she would need to make a transition. Delise explained that traffic pattern had already changed with recent commercial developments, so this was the first year that they hadn't been open all winter. The market has changed. Adams stated that leasing back would be an option. Schumann asked if she would relocate. Delise indicated that she wasn't sure, but most likely not. Wolfsteller asked what Allied owns on Block 35. Koropchak replied that they own the Times building, the old theater parking lot and the bank building. Adams stated that Allied essentially owns about 2/3 of the block. Andrews suggested that the HRA should take the matter under consideration, do some research and bring back the item back for discussion at the next meeting. Andrews thanked Adams and Delise for presenting the option to the HRA. Delise stated it has been 2 years since the first listing of the property. Frie asked if Delise required any kind of terms. Adams stated that as there are two owners of the property, she would prefer to cash out. Frie asked if the HRA did purchase the property, would she rent it back. Delise stated that she was unsure at this time. MOTION BY COMMISSIONER FAIR TO PLACE CONSIDERATION OF PURCHASE OF THE CEDAR STREET GARDEN CENTER PROPERTY ON THE • MAY HRA AGENDA FOR DISCUSSION AND DECISION. 2 . Andrews stated that research on the option needed to be done in the interim. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3 YEYS - 0 NEYS. 5. Consideration to approve a resolution adopting a modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. 1 and establishing TIF District No. 1-38 therein and adopting a TIF Plan therefore. Applicant: Walker In- ~tnre_ Koropchak reported that the resolution the HRA is being asked to consider establishes a TIF district fora 5 acre, 1.5 acre developable site. Koropchak explained that all statutory requirements have been met and that the Planning Commission had approved their resolution supporting the land use as consistent with the plan. Koropchak stated that Ehlers' projections indicate that the district should generate $75,000 in increment. MOTION BY COMMISSIONER ANDREWS TO APPROVE A RESOLUTION ADOPTING THE MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTERAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND ESTABLISHING TIF DISTRICT NO. I-38 THEREIN AND THE ADOPTION OF THE TIF PLAN THEREFORE. • MOTIONED SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3 YEYS - 0 NEYS. 6. Public Hearing on the Business Subsidy Agreement and Land Sale. a. Consideration to adopt a resolution approving the Purchase and Redevelopment Contract between the HRA and WRE, LLC including the business subsidy agreement and land sale. Koropchak stated that she had talked with the HRA attorney, who had spoken with WRE about the proposed changes. Koropchak reviewed the proposed changes. In section 3.6 referencing indemnification, Walker does not want to indemnify the City and HRA until after closing. Walker's attorney was adamant on this item. Frie asked if this was an disagreement between two attorneys. Frie noted that it is hard to get insurance on something you don't own. Koropchak stated that the HRA attorney didn't seem to have a good reason to keep it in. Andrews stated that perhaps the HRA could acquiesce on that item. Koropchak also explained that Walker's attorney had requested a change regarding capping the amount of expenses for creation of the district and • 3 • City project fees. The HRA Commissioners agreed that Walker should be required to pay actual costs. Koropchak explained that she had also further defined employment items to the applicant. That being that two part times jobs must equa137.5 hours, and that a permanent employee is not temporary or seasonal. Koropchak noted that the applicant is purchasing 1.5 acres for $43,560. The balance of 4.6 acres Walker is getting at no cost due to power lines and ponding. Vice Chair Andrews opened the public hearing. Hearing no comment, Vice Chair Andrews closed the public hearing. MOTION BY COMMISSIONER FAIR TO ADOPT A RESOLUTION APPROVING THE PURCHASE AND REDEVELOPMETN CONTRACT BETWEEN THE HRA IN AND FOR THE CITY OF MONTICELLO AND WRE, LLC, INCLUDING THE BUSINESS SUBSIDY AND LAND SALE, WITH A CHANGE TO SECTION 3.6 OF THE CONTRACT, REGARDING INDEMNIFICATION REQUIREMENTS. • MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED, 3 YEYS - 0 NEYS. b. Consideration to approve a resolution authorizing Interfund Loan for Advance of certain costs in connection with TIF District No. 1-38. Koropchak stated that the HRA is being asked to consider a resolution which approves a loan for certain costs for the district. The loan authorizing the HRA to advance funds of $152,460 with 8% interest rate. MOTION BY COMMISSIONER FAIR TO ADOPT A RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNESTION WITH TIF DISTRICT NO. 1-38. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED, 3 YEYS - 0 NEYS. 7. Consideration to approve the election of HRA officers and approve appointment of commissioner to subcommittees. Fair questioned whether Frie still intended to refrain from acting as chair in the coming year. Frie asked who would be chair in the rotation, should be choose to n U 4 refrain. Koropchak stated that it would be Andrews. Fair asked if the new officer slate would be in effect as of July. Koropchak confirmed. MOTION BY COMMISSIONER FRIE TO NOMINATE AND ELECT STEVE ANDREWS AS CHAIR AND BILL FAIR AS VICE CHAIR OF THE HRA FOR YEAR 2007, AND APPROVE THE APPOINTMENT OF RICK WOLFSTELLER AS SECRETARY-TRESURER FOR 2007. MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 3 YEYS - 0 NEYS. Koropchak reported that currently, Commissioners Lahr and Barger serve on the marketing committee, Commissioner Frie is the HRA representative to the Comp Plan Task Force and Commissioner Andrews serves on the Fiber Optics Committee. MOTION BY COMMISSIONER ANDREWS TO ADOPT THE APPOINTMENT OF COMMISSIONERS TO COMMITTEES BASED ON 2006 APPOINTMENTS. MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 3 YEYS - 0 NEYS. 8. Consideration to review and accept the year-end financial reports for the HRA General Fund and TIF Fund as prepared by HRA Treasurer Wolfsteller and Senior • Accountant Paula Mastev. Wolfsteller stated that much of the report was put together by Senior Accountant Paula Mastey. He stated that the report provided to the HRA is somewhat different than the TIF reports that go to the state auditor. However, the revenues and expenditures are accurate for 2007. Wolfsteller indicated that the one item that hadn't been completed is a break out of the main district downtown (1-22); most of the revenue and expenditures are listed together. Wolfsteller noted that the end total is correct. In summary, there is a net of almost $300,000 in all of the downtown districts combined. Koropchak stated that the revenues transferred to the HRA general fund include the transfers from City to HRA for land sale at the business campus, including AVR, Dahlheimer and Karlsburger. The expenditures for the improvements at Otter Creek do have the impact of appearing to decrease fund totals. Koropchak stated that internally staff need to discuss whether improvement costs should be allocated to individual TIF districts. Wolfsteller stated that the balance sheets in essence show the HRA as land rich and cash poor. Frie asked if the remaining payments for the Chadwick land show up. Wolfsteller stated that they do not. Fair recommended tabling approval until the final version of the statement comes forward. n • Koropchak inquired of Wolfsteller where advance payments come from. Wolfsteller replied that they should come from the HRA general fund to the districts. Wolfsteller stated that the City shouldn't take money from the HRA to buy out the remaining land from Chadwick. He suggested that perhaps each year, the HRA would make a payment to the City to for property sold. Wolfsteller stated the remaining amount owed to Chadwick is $750,000. 9. Consideration to review for amending the HRA Business Subsidy Criteria and HRA Bylaws for possible amendment and to call for a public hearing if determined. Koropchak explained that the City had begun preliminary discussions regarding a possible merger of the HRA and EDA. Koropchak stated that she has been asked to start working on the item Koropchak commented that her recommendation would be that the new entity be structured as an EDA, as the EDA has more statutory powers. Koropchak noted that the HRA's assets and powers will need to be transferred and accepted by the EDA. The make-up of the board will also need to be determined. Koropchak stated that it would be her recommendation that appointments are limited to City residents because of the dollars involved. Due to the pending restructuring, the Commissioners chose not to seek amendments to the bylaws and subsidy criteria. Koropchak indicated that as such, no public hearing would be required. • 10. Consideration of an update on the Comp Plan (downtown) and discuss Froslie purchase offer. Frie reported that he and Fair had shared attendance at the Comprehensive Plan Task Force meetings. Frie stated that the process has been somewhat disappointing and that perhaps it was not an ideal place to have a serious discussion about the future of Monticello. Schumann explained that the findings from the neighborhood meetings and the task force will now go forward to the Planning Commission and City Council for review and direction. Frie asked if there were any pending proposals in the legislature to eliminate TIF or to adjust requirements. Koropchak stated that to her knowledge, TIF will continue to exist much as it is, but perhaps with minor adjustments. There has not been much discussion to do away with the program this session. Koropchak stated that she had received another email indicating that Froslie will sell her property for $500,000. Fair noted that as the Springborg property is no longer available, purchase of this property is less interesting. Koropchak stated that at the based on the recent email asking price, the rate is $25 per square foot. Fair stated that he believes the price is excellent on garden center and involves little demolition and no relocation. He also noted that on the adjacent block, Allied is actually interested in putting together a project. Wolfsteller commented that parking wasn't the issue in . moving the Allied project forward; it was overall cost. 6 MOTION BY COMMISSIONER FAIR TO WITHDRAW ANY OFFERS ON THE FROSLIE PROPERTY, AND TO INDICATE THAT THE HRA IS LOOKING AT A DIFFERENT DIRECTION. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3 YEYS - 0 NEYS. 11. Consideration to authorize payment of HRA bills. MOTION BY COMMISSIONER FAIR TO APPROVE THE BILLS. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED, 3 YEYS - 0 NEYS. 12. Consideration of HRA Executive Report. Koropchak referred to the report included in the packet. 13. Committee Reports: a. Andrews stated that he had missed recent fiber meetings, but indicated that the Council had taken action to move forward on an RFP for financing the t system. b. Koropchak reported that the Marketing Committee is working with students from SCSU on a Monticello bio-science campus feasibility study. A presentation of results will take place on Apri130t1i at SCSU. 14. Next meeting: Wednesday, May 2, 2007 15. Adjourn MOTION BY COMMISSIONER FAIR TO ADJOURN. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED. ,~~ ~, >. ~ i,~~ir~ ,~` ° hair Secr r~i ~ • 7