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HRA Minutes 08-01-2007HRA Minutes - 08/01/07 MINUTES HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, August 1St, 2007 Commissioners Present: Vice Chair Bill Fair, Brad Barger, and Dan Frie Commissioners Absent: None. Council Liaison Present: Wayne Mayer Staff Present: Ollie Koropchak, Rick Wolfsteller, Angela Schumann 1. Call to Order. Vice Chair Bill Fair called the meeting to order. 2. Consideration to approve the June 6th, 2007 HRA Minutes. Koropchak noted that the date on the minutes should be changed from June 5th to June 6th, 2007. MOTION BY COMMISSIONER BARGER TO APPROVE THE MINUTES WITH THE CORRECTION AS NOTED. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3- 0. 3. Consideration of adding or removing items from the a eg nda• Barger added as item 8a the consideration of acceptance of his resignation from the HRA. 4. Consent Agenda. NONE. 5. Consideration to review City budget worksheets and accept the HRA 2008 Preliminary Budget. Koropchak provided the City budget worksheets and 2008 preliminary budget. Koropchak referred to goals and objectives listed and indicated that a copy of the vision statement and plan that was written for bio-science was requested to be incorporated into the comp plan. HRA Minutes - 08/01 /07 Koropchak explained that the primary issues for the HRA were succession planning and the consistent administration of goals, policies, statutes, etc. Programs that the HRA is responsible for include job creation, downtown redevelopment, and marketing. Koropchak reminded them that this is for Council budget funding. Koropchak reviewed measurement items, including tax increment collected, marketing, new jobs created, annual payroll for jobs created and others. Fair asked why 2006 showed job creation at zero. Koropchak stated that no districts had been completed in 2006. Koropchak stated that 2007 included Karlsburger, and 2005 included Dahlheimer. Koropchak reviewed the capital improvement budget. When talking about bio- science, the goal has been to create jobs at a higher wage level. Koropchak had budgeted $250,000, which is being split with request from EDA. She noted that a potential merger impacts this number. The request is spread over five years, at $50,000 each year. The same cost-sharing was applied to the possible creation of ajob-training campus. A fund for downtown land purchase was also identified in the preliminary budget. Koropchak explained that these numbers are over and above what the HRA has in funds. Barger asked how this compares to previous years. Koropchak responded that the IDC had made a recommendation that the HRA and Council contribute matching dollars. HKGi, the City's comprehensive plan consultant has stated that the reason the City buys land is so that it can get the uses it wants. Koropchak stated that she is suggesting that the HRA play that role. HRA doesn't currently have dollars to match, because right now the HRA is paying for the land assessment of Otter Creek Crossing. Frie stated that the Council and Mayor had previously stated that they were interested in HRA acquiring additional land. Fair noted that this is a preliminary budget. Fair asked if Council is interested in downtown redevelopment. Koropchak stated that the preliminary budget is a wish-list only. Frie stated that he would like to set aside funding or future additional industrial acquisition. Frie asked where proceeds from the industrial park land sales go. Koropchak stated that the dollars at closing go into general fund. Trunk fees are paid out of that, then the balance goes to pay for additional acquisition. The tax increment is used to pay assessments and administrative costs. Koropchak indicated that the Council hoped the HRA would have a net profit from sales to pay for another 2 HRA Minutes - 08/01/07 acquisition. Koropchak stated that she is not sure the HRA will have that ability. Frie asked if the HRA has to match. Koropchak stated that was the original discussion. Fair stated that the HRA should look at profits derived, which should be put toward other acquisitions and dedicated that way. Fair noted that although it is hard to predict what those revenues are going to be, it should be a policy. Barger stated that in looking at land cost, $250,000 is not that unreasonable. MOTION BY COMMISSIONER FRIE TO ACCEPT THE PRELIMINARY BUDGET WORKSHEET FOR THE HRA AND TO RECOMMEND THAT AS PART OF THE PRELIMINARY CAPITAL IMPROVEMENT PLAN THAT THE CITY COUNCIL DEDICATE $250,000 OVER 5 YEARS FOR FUTURE LAND PURCHSES FOR FUTURE INDUSTRIAL PROPERTY, WHICH MAY INCLUDE A BIO-SCIENCE PARK. MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED, 3-0. MOTION BY COMMISSIONER FRIE TO RECOMMEND THAT THE HRA ADOPT AS ITS POLICY THAT THE PROFITS FROM SALE OF INDUSTRIAL LAND BE PLACED INTO A DEDICTED FUND FOR FUTURE ACQUISITION OF INDUSTRIAL LAND. MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED, 3-0. 6. Consideration of a request to discuss for potential purchase of the property located at the northeast corner of Pine/Third Street. Koropchak stated that one of the Council members had emailed information on the possible purchase to the City Administrator, with the idea that the City or HRA would be interested in purchasing it. Koropchak reported that according to the Council member, the price is $549,000. It is unoccupied at this time. The site advantage is that the City would own a half block. Barger confirmed that the City owned the other half block. Koropchak also noted that there would be no relocation cost. Koropchak noted that she had also provided an analysis on square footage prices. The site is '/ acre. She noted that the HRA had made offers on the recent downtown property of $13.31 - $17.50, with $190,575 being the highest based on what was offered to Cathy Froslie. HRA Minutes - 08/01/07 Koropchak stated that in looking at where would the dollars come from, the State auditors were concerned about the HRA not spending dollars in old TIF Districts. For example, the HRA recently used funds in Construction 5 district to purchase the Cedar Street Garden Center. Koropchak estimated the cash balance and projected revenues of the three older districts total about $1 million. Koropchak stated that she would caution that finance person Paula Mastey is going to go back from beginning from creation of districts, because there is a difference between HRA and City records. Fair asked when the funds need to be turned back. Koropchak stated that decision could come at any time. Fair asked what the possibility is of purchasing and renting the building. Barger asked if the City would purchase the property. Mayer stated that any reference to its use for Deputy Registrar would provide no benefit. Fair asked if Mayer thought Deputy Registrar would increase with better visibility. Mayer stated that he didn't think so. Koropchak noted that Barger had referenced the HRA focusing purchases in a target area. Koropchak referenced that the HRA also recommended the involvement of a developer or downtown businesses. She noted that a master plan would be the key. • Barger stated that this doesn't seem like it is in our target area. Frie stated that he agreed while the HRA should use the money in the fund balances, it should be cautious where it is spent. Koropchak asked if perhaps the HRA was interested in using the tax increment to help fill financing gaps, rather than buying properties. Koropchak referenced the Mayor's desire to do a project with stakeholders. Barger stated that his feeling would be to say no to the purchase of this property and stay focused on the downtown. Mayer recommended perhaps making a low offer in the range the HRA has offered other properties. Fair stated it is a good building with good exposure. Fair commented that he would rather have people fight over parking rather than seeing them empty. Fair stated that what is attractive is that it is adjacent to a City lot, so that the City could relocate the DMV and develop the whole thing. Frie noted that a developer would be looking to get the parking lot for free. MOTION BY COMMISSIONER FRIE TO MAKE AN OFFER OF $9.22 PER SQUARE FOOT THROUGH ANON-BINDING LETTER OF INTENT. Barger confirmed it is not a contract, that the letter just opens conversation. Fair asked what the total price is at $9.22 per square foot. Schumann reported that it would be $100,405.80. Barger stated that he is still thinking we should keep our focus. Frie stated that while he agrees, if the HRA got it at that price, it would be worth it. 4 HRA Minutes - 08/01 /07 ,---~ MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 3- 0. 7. Consideration to authorize payment of HRA bills. Barger noted that a couple of TIF districts had been retired. Koropchak stated that in December, 1-23 and 1-25 were decertified. After quantifying administrative costs, the excess increment has to be mailed to County. MOTION BY COMMISSIONER BARGER TO AUTHORIZE PAYMENT OF HRA BILLS. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3- 0. 8. Consideration of HRA Executive Report. Koropchak noted that the EDA will be meeting next Wednesday regarding the loan application from Washburn Computer Group. Washburn will use the revolving loan based on a 30,000 square foot expansion. She noted that the EDA has additional dollars available since Twin City Die Casting paid there balloon payment. Koropchak reported that the HRA had been provided with a copy of the 2007 Tax increment reports, which had been sent. Koropchak explained that with the TIF District established for interchange, the County certified the wrong parcels and recorded the whole plat for the TIF District. Tax increment was already certified for 2007. She indicated that what happened is that the tax increment was collected on the Home Depot site only, resulting in lower payments and shorter duration. Barger asked if City could use the garden center. Koropchak stated that she had talked with Simola about that item. Koropchak noted that Walker-In Store had closed on their property. There is an issue about added building permit expenses, but they should start construction within 30 days. Council did pass a resolution to proceed with a fiber optics referendum. She also noted that she had received a preliminary inquiry regarding a large facility looking to site a regional call center. 8a. Barger's Resignation 5 HRA Minutes - 08/01/07 Fair requested that the HRA encourage the City to proceed with the potential merger due to the lack of HRA members. Mayer stated that they will hopefully make a decision before the end of the month. Koropchak asked about the effective date for Barger's resignation. Barger stated that he had proposed this meeting, but agreed to a resignation from the HRA to be effective on September 12, 2007.. Fair noted he would not be present for the September 5th meeting. MOTION BY COMMISSIONER FRIE TO CHANGE REGULAR HRA MEETING OF SEPTEMBER 5th, 2007 TO SEPTEMEBR 12th, 2007. MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED, 3-0. 9. Committee Reports a. Marketing NONE. b. Fiber Optics NONE. C. HRA/EDA Merger -Fair stated that the HRA had expressed its concerns about the make-up of a new Commission and protecting the revolving loan fund and again requested that the Council act on moving forward expeditiously. Mechanics 10. Next Meeting PREVIOUSLY ADDRESSED. 11. Adjournment. MOTION BY COMMISSIONER FRIE TO ADJOURN. MOTION SECONDED BY COMMISSIONER BARGER. Vice Chair i ~ .^-> 1, f , Secre `fry 6