HRA Agenda 08-11-1999
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, August 11, 1999 - 7:00 p.m.
City Hall
MEMBERS: Chair Bob Murray, Vice Chair Darrin Lahr, Brad Barger, Steve Andrews, and Dan
Frie.
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COUNCIL LIAISON:
Brian Stumpf.
OFFICERS: Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, and Recorder
Lori Kraemer.
Call to Order.
Consideration to approve the July 28, 1999 BRA minutes.
Consideration of adding agenda items.
Consent Agenda:
Consideration of items removed from the consent agenda for discussion.
Consideration to review the Business Subsidy Criteria Example for development of
Monticello criteria and setting a public hearing date.
7. Consideration to authorize payment of monthly BRA bills.
8. Consideration of Executive Director's Report.
9. Consideration of Committee reports:
a) City Council - Brian Stumpf
b) Community Center - Bob Murray
c) MCP - Steve Andrews
d) North Anchor - Dan Frie and Bob Murray
10. Other Business.
11. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Special Meeting
Wednesday, July 28, 1999 -7:00 p.m.
City Hall
Members Present:
Chair Bob Murray, Vice Chair Darrin Lahr and Steve Andrews
Absent:
Members Brad Barger, Dan Frie and Council Liaison Brian Stumpf
Staff Present:
Executive Director Ollie Koropchak and Recording Secretary Lori
Kraemer.
Guest:
Steve Krenz, Midwest Graphics
1. Call to Order.
Chair Bob Murray called the HRA meeting to order at 7:00 p.m.
2.
Consideration to approve the Julv 14. 1999 HRA minutes.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY BOB MURRAY
TO APPROVE THE MINUTES, AS WRITTEN, OF THE HRA MEETING OF JULY
14, 1999. Motion carried with Steve Andrews abstaining.
3.
Consideration of adding alzenda items.
Ollie Koropchak asked to discuss the Grassl walkway. This was put under Other
Business.
4. Consideration to review for aooroval funding options as requested bv Steve Krenz.
Midwest Graphics.
Ollie Koropchak presented the staff report, providing some options for consideration
regarding the request by Steve Krenz, Midwest Graphics, for assistance of $200,000 to
$250,000, approximately ono;half the estimated costs of $400,000, to move a portion of
the Midwest Graphics' Plymouth business operation to Monticello.
Ollie Koropchak spoke with Mark Houge, Allied Companies, and reviewed the criteria
for amending the contract under Option A or C. He agreed to the concept of Option A,
but requested deferring authorization to prepare document by Attorney Bubul until
confirmation with Steve Krenz..
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HRA minutes - 7/28/99
The commission members questions the average pay rate stated by Steve Krenz who
clarified that this is an average and that some wages will be higher, some lower. He also
stated that the minimum pay wage would be approximately $11 and the maximum was
approximately $28. He explained that the wages would add up to $1. 7 for the additional
40 jobs. Ollie asked Steve Krenz to complete a worksheet describing the number
of positions for each pay rate range.
The commissioners noted that it is not the HRA' s intention to fine tune the wages and
after some discussion, the members were satisfied with Mr. Krenz's breakdown of jobs
and wages. Mr. Krenz also stated that the attraction to Monticello by present employees
is housing; the attraction for people already in Monticello is the pay rate. Steve also
stated that Midwest Graphics had exercised the five-year option to purchase the building
from Allied Companies. Ollie also stated Rick Wolfsteller agreed to loan BRA the
money at 6.5% or 7% interest, and the City Attorney was in agreement with this as well.
The commissioners questioned the recommendation for $100,000 versus $181,000 and
Ollie Koropchak stated this is consistent with the EDA loan fund, but it is not required.
Steve expressed the importance of the entire $181,000 consistent with the previous
agreement.
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Ollie Koropchak outlined the three options for the commissioners to consider.
A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DARRIN LAHR
TO PROVIDE UP-FRONT ASSISTANCE IN THE AMOUNT OF $181,000 AT AN
INTEREST RATE OF 7%, SUBJECT TO RUNNING NEW REVENUE STREAMS
AND AMENDING THE PRIVATE REDEVELOPMENT CONTRACT BETWEEN
HRA AND ALLIED COMPANIES AS DEFINED. Motion carried unanimously.
5. Other Business.
Ollie Koropchak advised the commissioners that she and Rick Wolfsteller met with Bill
Grassl and agreed upon a price per foot on the 7' walkway. Mr. Grassl requested the
HRA extend behind County Travel (Brad Larson's) property. The per square foot
selling price is $6 for a total land price of $7,140. Ollie also stated that improvements
will need to be made including concrete pavers and lighting along the 7' easement.
Ollie Koropchak asked the commissioners of their interest to pay for these
improvements which she estimated at approximately $20,000. These improvements
could be funded through TIF District 1-22 revenues. Ollie also noted that this is part of
the revitalization plan for downtown as well as being part of the City's Comp Plan.
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HRA minutes -7/28/99
The commissioners agreed that this is preferable for the downtown area, but they feel the
HRA funds are already committed and that the Council wanted this 7' strip. They would
like to see the Councils action come full circle. Council recommended it, council should
pay.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE
ANDREWS THAT DUE TO PREVIOUS FUNDING COMMITMENTS, THE BRA IS
NOT INTERESTED IN FUNDING THE 7 FOOT W ALKW A Y. Motion carried
unanimously.
Other Updates:
Ollie Koropchak advised the commissioners of the Review of TIF revenue from the
County. Custom Canopy has not paid, nor has Lake Tool. She has spoken to
Attorney Steve Bubul and will follow-up.
Twin City Die Casting still looks favorable for Monticello to be the chosen site, but there
is yet to be a commitment made. Ollie Koropchak did send a letter noting the City's
willingness to participate in TIF.
6.
Adiournment.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE
ANDREWS TO ADJOURN THE MEETING AT 7:50 P.M. Motion carried
unanimously.
Chair, Bob Murray
Recording Secretary, Lori Kraemer
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lIRA Agenda - 8-11-99
6.
Consideration to review the Business Subsidy Criteria ExamDle for develoDment of
Monticello criteria and settinlZ a Dublic hearinlZ date.
A. Reference and Backl!round:
According to the July 12 Memo from Mark Ruff, a business subsidy can not be granted
until a grantor (HRA or City?) has adopted criteria for awarding a subsidy. A public
hearing must be held prior to adoption of the criteria. This new requirement becomes
effective August 1, 1999.
I have enclosed a copy of a business subsidy example from Mark Ruff. You will notice, I
have included questions for Mark to answer. Also, enclosed are copies of our existing
TIF Policies, Economic TIF Process and wage and job level goal sheet. As you recall,
we have a Pre- TIF Agreement. After I hear from Mark, perhaps combining existing and
example criteria into one document is appropriate. From the perspective ofthe developer
(manufacturer) the simpler the criteria, the better.
The Subsidy Agreement only requires a little modification to our existing Private
Redevelopment Contracts and Attorney Bubul will cover those items. However, the
Council will need to approve the Redevelopment Agreement which means assistance
levels offered to developers must be in agreement between developer, lIRA, and Council
prior to preparation of documents or to a commitment of Monticello as their site location.
Next, again a question: Who conducts the public hearing if the subsidy is over the amount
of$100,000? HRA or City.
Lastly, there is nothing new in the report procedures. Need definitions of benefit date:
Date business receives subsidy or date business moves in?
It is important to develop our criteria and hold a public hearing particularly if Twin City
Die Casting commits to the City of Monticello. As we do not have any action items on
the agenda, perhaps, this meeting would be better served as a workshop for development
of the criteria. In the meantime, I'll connect with Mark or Steve and begin a draft copy.
More information provided at meeting.
B. Alternative Actions:
1. A motion calling for a public hearing date of
2. A motion requesting City Council call for a public hearing date of
3.
A motion to table any action or to continue.
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lIRA Agenda - 8-11-99
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C.
A motion of no interest.
Recommendation:
Alternative No. 1 or No.2 depending on answers from Mark Ruff.
D. Supporting Data:
Memo, criteria, and lIRA existing policy, process, and goal sheet.
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JUL 12 '99 08:13AM EHLERS & ASSOCIATES
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To:
From:
Subject:
Date:
Ollie Koropchak - City of Monticello
Mark Ruff
Business Subsidies
July 12. 1999
Beginning August I ~ 1999. state and local governments face new requirements for grantina business
subsidies. These requirements replace the current wage andjob goal reporting. The new law will be codified
as Minnesota Statutes, Section 116J.993.
The regulation of business subsidies adds new complexities to the development process. Make sure that you
understand the statutory requirements before providing direct or indirect assistance to any for~profit or
non-profit entity. Ifin doubt, ask questions. Many of these provisions are subject to interpretation. There
appears to be a recognition that the statute contains flaws that shouid be addressed next year.
What is a business subsidy?
The statute is important for both the definition and the specifie e~clusions. Business subsidy are defined as
"grant, contribution of personal property. real property, infrastflJcture, the principal amount of a loan atrates
btlow those commercially available to the recipient, any reduction or deferral of any taX or al\Y fec, any
guarantee of any payment under any loan, lease, or other obligation. or any preferential use of government
facilities given to a business".
The statute speCifically excludes certain items from the definition. The following llJ"Cl not business subsidies:
· businen subiidy of I,=S5 than $25,000.
. assistance generally available t.O all bUllil"less or to a. similar class ofbusinels.
. public improvements to buildings or land owned by state or local government that ::tetvc a public
purpose and do not principally benefit a singie business or a defined groop of businesses at the time
the improvements are made.
polluted redevelopment property (M.S. 116J.552)
renovating oid or decaying building stock or bringing it up to code if not more than 50% of the total
cost.
assistance to job training/readiness organizations to usist with those services.
housing.
pollution control or abatement.
energy conservation.
tax reduction from conformity with federal tax law.
workers and unemployment compensation.
benefits derived from regulations.
funds from bonds allocated onder Chapter 474A.
collaboration between Minnesota higher education institution and a business.
soils condition TIF district.
redevelopment when recipient's investment in the purchase of the site is 70% or more of the current
assessor's estimated market value. .
general changes in TJF law and other general tax law for a principally technical nature.
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JUL 12 '99 08:13AM EHLERS & ASSOCIATES
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Business Subsidies
July 12. 1999
Page 2
A business subsidy must achieve a public purpose other than increasing the tax base. Job retention may serve
as a public purpose only when the Joss of jobs is "imminent and demonstrable".
A key term in the statute is "grantor". The grantor is the state or local government agenc with the authori
to iraot the subsidy. for the purposes of this statute applicable local government agenc s may Include
cities, ~Quntios. town, housina and redevelopment luthoritio$, economic development al.lthoritilils, port
authorities, and other _ntitio$ that loc;:aI governmentllnay ~reate to grant business subsiditli.
Criteria
Business subsidios cannot be sranted until th~ntoihas adopted criteria for awarding business subsidies.
This provision seems to impose separate requIrements for each potential grantor. While schools are not
listed, they have business subsidy power in the tax abatement statute.
The only statutory requirement for contents of the criteria is a policy for wages on jobs created by the
subsidies. A public hearing must be held before adopting the criteria, The statute does not discuss a process
for amending the criteria.
. Subsidy Aareement
AU business subsidies covered by the statute requiro a subsidy agreement. The >>tatute d.scrib.. the
minimum contentS ot'th. agrooment. A potential com pI iOlting factor fordtvllopmOl\tprojocts i5 tho requirea
comm itment of the recipient "to continue operations at the site where the subsidy is used for at loast flve
years after the benefit date", The subsidy agreement must be approved by the local elected governing body.
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The agreement must describe what happens if the recipient fails to fulfill its obligations. Failure to meet
goals requires partial or full repayment of the assistance with interest.
Public Hearing
If the amount of the business subsidy exceeds $100.000, then a public hearing is required. The statutes
contains specific criteria for the notice of hearing. The notice must be publisheq at least 10 days prior to the
hearing. ~ . ~ ....; ~
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The statute establishes a set of subsidy reponing procedure ( The recipient of the assistance is required to
provide infonnation to the grantor for two years after the be~fits date or untit the goals are met, whichever
is later. The intormation shall be reported on fonns developed by DTED. The statute creates penalties for
failure to provide the appropriate reports.
N:\Minnsota\Monticello\memo subsidics.wpd
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AUG 03 '99 03:16PM EHLERS & ASSOCIATES
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CITY OF X
Business Subsidy Criteria
1. PURPOSE
1.01 The purpose of this criteria is to establish the City's position as relates to the use of business
subsidies, as defined in Minnesota Statutes 116J.993, Subdivision 3, for private development. This
criteria shall be used as a guide in processing and reviewing applications requesting business
subsidies.
1.02 The City shall have the option of amending or waiving sections of this criteria when determined
necessary or appropriate. "Amendinents to these ct,itetiaaro subject'to'pub1ic::h~ar.in, rcq:Li.ifementS
pUTSuantto Minnesota Statutes, Sections'l16J.'993' through l'l6J.995,.' . '... ........ ".........., ,
2. STATUTORY LIMITATIONS
2.01 In accordance with the Business Subsidy Criteria, Business Subsidy requests must comply with
applic;able State Statllt~s. The City of X' ability to grant business subsidies is governed by the
limitations established in Minnesota Statutes J 16J.993 through 116J.995.
3. PUBLIC POLICY REQUIREMENT
3.0 I All business subsidies must meet a public purpose other than increasing the tax. base. Job retention
may only be used as a public purpose in cases where jab loss is imminent and demonstrable
4. BUSINESS SUBSIDY APPROVAL CRITERIA
4 .01 AU new projects approved by the City of X should meet the following mandatory min imum approval
criteria. However, it should not be presumed that a project meeting these criteria will automatically
be approved. Meeting these criteria creates no contractual rights on the part of any potential
developer.
4.02 The business subsidy shaH be provided within applicable state legislative restrictions. debt limit
guidelines, and other appropriate financial requirements and policies.
4.03 The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or required
changes to the plan and Ordinances must be under active consideration by the City at; the time of
approval.
4.04 Business subsidies will not be provided to projects that have the financial feasibility to proceed
without the benefit of the subsidy. In effect, businoss subsidies will not be provided solely to
broaden a developer's profit margins on a project. Prior to consideration of a business subsidy
request, the City may undertake an independent underwriting of the project to help ensure that the
request for assistallc;e is valid.
4.05 Prior to approval of a business subsidies financing plan, the developer shall provide any required
market and tinancial feasibility studies. appraisals, soil boring, information provided to private
lenders tor the project, and other infonnation or data that the City or its fmancial consultants may
require in order to proceed with an independent underwriting.
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4.06 Any developer requesting a business subsidy should able to demonstrate past successful general
development capability as well as specific capability in the type and size of development proposed.
4.07 The developer must retain ownership of the project at least long enough to complete it, to stabilize
its occupancy, to establish the project management. and to initiate repayment of the business
subsidy.
4.08. A recipient of a business subsidy must make a commiunent to continue operations at the site where
the subsidy is used for at least five years after the benefit date.
4.09 The level ofTIF funding should be reduced to the lowest possible level and least amount of time by'
maxjmizing the use of private debt and equity' financing first. and then using other funding sources
or income producing vehicles that call be structured into the project financing. prior to using
additional TlF funding.
S. TAX INCREMENT PROJECT EV ALVA TJON CRITERIA
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5.01 All business !';ubsidy requests will be evaluated on the following criteria for comparison with other
proposed business subsidy requests reviewed by the City, and for comparison with other subsidy
standards (where appropriate). It is realized that changes in local market.., costs of construction. and
interest rates may cause changes in the amounts of Tax Increment subsidies that a given project may
require at any given time.
5.02 Some criteria, by their very nature, must remain subjective. However, wherever possible
"benchmark" criteria have been established for review purposes. The fact that a given proposal
meets one or more "benchmark" criteria does not mean that it is entitled to funding under this policy,
but rather that the City is in a position to procecd with evaluations of (and comparisons between)
various business subsidy requests, using uniform standards whenever possible.
5.03 Following arc the evaluation criteria that will be used by the City of X
A. All business subsidy requests should optimize the private development potential of a siw.
B. All business subsidy requests shol1ld obtain the highest possible private to public financial
investment ratio. The Council establishes a benchmark ratio of3 parts private to 1 part public
funding for Pl'ojects. Housing and reuiVcommercial projects shall be reviewed on an
individual basis.
C. All business subsidy requests should create the highest feasible number of jobs on the site.
The Council establishes a benchmark of one newly created FTE job per 56,000 of public
assistance or one retained. FTE job per $3,000 of public assistance provided to projects and
establishes a benchmark of one newly created FTEjob per $10,000 of public assistance or one
retained FTEjob per $3,000 of public assistance provided to the Industrial Park Project Area.
All jobs will be "Livin& waCe job." at determined by tbe Department of Labor.
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D. All business subsidy requests should create the highest possible ratio of property taxes paid
before and after redevelopment. Given the different assessment circumstances in the City, this
ratio will vary widely. However, under normal circumstances, the Council will expect at least
a 1:2 ratio of taxes paid before and after redevelopment.
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E. Business subsidy requests should normally not be used to support speculative industrial.
commercial. and office projects. In general, speculative projects are defined as those projects
which have letters ofintent or pre-leasing for less than 50% of the available leasable space.
F. AU business subsidy requests will be reviewed to detennine the feasibility to provide the City
with equity participation in new developments (through a share of the profits), or to treat the
business subsidy as a second mortgage with fixed payments.
G. All business subsidy requests involving displacement of low and moderate income residents
should give specitic attention to the re-housing needs of those residents. Nonnally, this should
be done as a part of the business subsidy. Adequate solutions to these re.housing needs will
be required as a matter of public policy.
H. Business subsidy requests will nomlally not be used in a project that involves an excessive
land and/or property price. This will normally be where the acquisition price is more that 10%
in excess of market value.
1. All business subsidy requests will need to meet the "but for" test. Business subsidies will not
be granted unless the need for the City's economic participation is sufficientthat, without that
assistance the project could not proceed in the manner as proposed.
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Business subsidies will not be used in projects that would give a significant, competitive
financial advantage over similar projects in the area due to the use of business subsidies.
K. Business subsidies will not be used when the developer's credentials, in the sole judgement
of the City, are inadequate due to past track record relating to: completion of projects, general
reputation and/or banknlptcy, or other problems or issues considered relevant by the City.
L. Business subsidies will not be used to support projects that place demands on City services.
or other capital or operating expenditures, that exceed the average city expenditures for similar
facilities. Consideration will be given to the total public costs that are required to support the
project, including offsite facilities costs that are required.
M. Business subsidies will not normany be used for projects that would generate significant
envirorunental problems in the opinion of the local. state. or federal governments.
N. Business subsidies will not be used when the schedule for development has exceeded the
schedule established in the development agreement, and whe,re the City has not agreed to
extensions of that schedule.
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o. Business subsidies should not be provided to those projects that fail to meet good public
policy criteria as detennined by the Council, including: poor project quality; projects that are
not in accord with the comprehensive plan, zoning. redevelopment plans, and city policies;
projects that provide no significant improvement to surrounding land uses, the neighborhood.
and/or the City; projects that do not provide a sisnificant increase in tax base; projects that do
not have significant new, or retained. employment; projects that do not meet financial
feasibility criteria established by the City; and projects that do not provide the highest and best
desired use for the propeny.
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- AUG 03 '99 03:17PM EHLERS & ASSOCIATES
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PROCEDURES
1. Meet with appropriate City StaIf to discuss the scope of the project, public participation being
requested, and other information as may be necessary.
2. Completion ofpreliminary Tax Increment Financing Assistance Application form. This form shall
be submitted to the Director ofCornmunity De'le1opment.
3. The request shall be re'liewed by City Staffon a preliminary basis as to the feasibility of the project.
The staff shall prepare a report on the project.
4. The application shall be placed on the City Council agenda for concept review. The applicant may
make a formal presentation of the project. The Staff will present its' findings.
S. If the Council's Preliminary Concept Review is poSitive, the applicant may elect to file a fonnal
a.pplication accompanied by a non-refundable fee ons,aao which shall only be refunded at the time
of signing a redevclopment contract should the project be approved.
6. If Zoning and Planning CommissioD action is required, it will be necessary for the applicant, at this
time, to make application to the Commission for Concept Review.
7. Following the necessary financial analysis and preparation of detailed plans. the City Council and
HRA., if necessary, shall take action on the project. If approved, the staff will be directed to
undertake the following steps:
_ prepare a redevelopment agreement based upon the terms approved
_ prepare a redeveloptnent pian and tax increment financing plan if required
At this time a deposit (cash or letter of credit) shall be required to defray costs involved with these
steps which shall also be refunded at the tine a redevelopmtmt contract is signed should the project
be approved
8. If a redevelopment plan or zoning action is required, the Zoning and Planning Commission. City
Couneil and HRA shall take the appropriate action at the same time that the redevelopment
agreement is considered for approval.
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QUESTIONS ON BUSINESS SUBSIDY CRITERIA FOR MARK RUFF
1.
Who is the grantor in Monticello? The HRA or City
2.
Who holds the public hearing for adoption of the subsidy criteria? HRA or City
3.
Understand Council must now approve Subsidy Agreement (Same as Redevelopment
Contract). But who holds public hearing for subsidies greater than $100,000? HRA or
City.
4.
4:02 - I'm not familiar with this? Explain.
5.
4: 06 - In Monticello for Economic Districts, generally the developer is the manufacturing
business owner which has little or any past development capabilities. We don't have
Opus, Ryan, etc.
6.
4:09 - Is this like EDA loan? Need uses and sources statement outlining City loan,
regional loans, state grants, bank, SBA, equity or early decertification ofTIF district?
7.
5:03 - C. Does this mean (or)?
G. Does displacement mean in cases of redevelopment: acquisition, relocation
costs?
H. What is market value? Appraisal, purchase price, assessor's value? For
industrial land in Monticello: Undeveloped land .25 per sq foot and developed land
.45 to .50 per sq ft per County Assessor and purchase price .80 per sq ft.
8. Procedures:
5. Is this not double talk? Non-refundable (only to be refunded)
7. Requires a second deposit.
Enclosure: Current TIF Process, wage and job level goals, TIF Policies.
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HOUSING AND REDEVELOPMENT AUTHORITY
City of Monticello
TAX INCREMENT FINANCING POLICY
Program Purpos~: The 'Monticello Housing and Redevelopment
Authority will utilize Tax Increment Financing to support the
community's long-term economic and housing goals.
Policy Considerations: The HRA will analyze and evaluate Tax
Increment Financing proposals based upon the following policy
considerations. Each proj ect shall be measured against these
considerations and the project's value shall be determined, based
upon meeting these considerations.
1. The project shall be consistent with the City's Comprehensive
Plan.
2. The project shall demonstrate long-term economic and/or
housing benefits to the community.
3. The project shall create and/or retain emplOYment for
Monticello residents.
4.
The project shall increase moderate priced housing options for
area residents.
S. The project shall facilitate the redevelopment or elimination
of "substandard" or "blighted" areas as determined by the liRA.
6. The project shall facilitate the "clean-up" of environmentally
unsound property.
7. The project shall provide additional public funding for public
improvements including utilities and/or park development which
would not otherwise be available.
8. The projec,t shall be deemed to promote additional desired
"spin-off" development.
9. The project shall demonstrate' "community involvement"
including demonstrated degrees of the various factors:'
a) Local residency of the company's owners and employees,. or
b) Local residency of the ',contractors involved in the
project, or
c) Membership in local business organizations, or>
d) Other similar factors.
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GOALS OF BUSINESS RECEIVING ASSISTANCE
Please indicate number of employees at each level and indicate the corresponding benefit level.
Number of jobs created is over the first two years.
Job Creation
Full-time
Hourlv Wage
Level
Part-time
(Exc!. benefits)
Less than $7.00
$7.00 to $7.99
$8.00 to $9.99
$10.00 to $11.99
$12.00 to $13.99
$14.00 to $15.99
$16.00 and higher
Hourlv Value
of Voluntary
Benefits (S)
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MONTICELLO
ECONOMIC DEVELOPMENT
TAX INCREMENT FINANCING
250 East Broadway
Monticello, MN 55362
Office of Economic Development (612) 271-3208
City Hall (612) 295-2711
TAX INCREMENT FINANCE PROCESS
Eligible llF expenditures: Land acquisition and site improvements.
Time: Six to eight weeks for approval
Type of project: Economic (for manufacturing and distribution)
Redevelopment (for blighted property)
Housing (for low to moderate income)
Soil Condition
Renovation and renewal
Developer: Description of project for construction, estimated project costs, number of new jobs within
two years and hourly wage.
TIF Plan
Contract:
Building Permit:
Amount of TIF requested: Land and/or site improvements and estimated costs.
Financing Method: Pay.as-you-go or front-up.
Executed Pre- TIF Agreement and $5,000 cashier check.
HRA authorizes preparation of TIF Plan.
Building and site plans submitted to Chief Building Official.
Findings for "but for" test: A proforma or letter from lender.
"But for" means that the project would not develop solely on private investment in the
reasonable future.
Job creation: Number of new full-time jobs to be created within two years.
Hourly wage: At least 90% of the jobs created must pay a wage of at least 160% of the
federal minimum wage requirement. Annual written report is required until termination
date. If job and wage goals are not met, the developer must repay the TIF assistance.
Level of TIF assistance.
Construction commencement and completion dates.
Copy of purchase agreement if assistance is for land acquisition.
Copy of lease agreement when appropriate.
Certification of site improvements incurred and paid.
Evidence of construction financing.
Proof of payment of insurance premiums.
Building permit issued after the TIF District is approved by City Council and
Contract for Private Redevelopment executed by the developer and the HRA.
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245 · (612) 295-2711 · Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd.. Monticello, MN 55362 . (612) 295-3170. Fax: (612) 271-3272
liS
.
.
.
7.
Consideration to authorize payment of monthly HRA bills.
Recommend authorization.
HRA Agenda - 8/1/99
~ ra ~~-
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Business Subsidy Criteria
Public Hearing and Adoption the day of , 1999.
PURPOSE
1:01 The purpose of this document is to establish the Housing and Redevelopment Authority's
criteria for granting of business subsidies, as defined in Minnesota Statutes 1167.993,
Subdivision 3, for private development. This criteria shall be used as a guide in processing
and reviewing applications requesting business subsidies.
• 1:02 The criteria set forth in this document are guidelines only. The HRA reserves the right in
its discretion to approve business subsides that vary from the criteria stated herein if the
HRA determines that the subsidy nevertheless serves a public purpose.
1:03 The Housing and Redevelopment Authority may amend the business subsidy criteria at
any time. Amendments to these criteria are subject to public hearing requirements
pursuant to Minnesota Statutes, Sections 1167.993 through 1167.994.
2. STATUTORY LIMITATIONS
2:01 In accordance with the Business Subsidy Criteria, Business Subsidy requests must comply
with applicable State Statutes. The Housing and Redevelopment Authority ability to grant
business subsidies is governed by the limitations established in Minnesota Statutes
1167.993 through 1167.994.
PUBLIC POLICY REQUIREMENT
3:01 All business subsidies must meet a public purpose other than increasing the tax base. Job
retention may only be used as a public purpose in cases where job loss is imminent and
demonstrable.
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245 • (612) 295-2711 • Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 • (612) 295-3170 • Fax: (612) 271-3272
MONTICELLO
HRA Business Subsidy Criteria
4. BUSINESS SUBSIDY APPROVAL CRITERIA
4:01 All new projects approved by the Housing and Redevelopment Authority should meet the
following minimum approval criteria. However, it should not be presumed that a project
meeting these criteria will automatically be approved. Meeting these criteria creates no
contractual rights on the part of any potential developer. ~'1'~p •N
4:02 The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or
required changes to the plan and ordinances must be under active consideration by the
City at; the time of approval.
4:03 Business subsidies will not be provided to projects that have the financial feasibility to
proceed without the benefit of the subsidy. In effect, business subsidies will not be
provided solely to broaden a developer's profit margins on a project.
4:04 Prior to approval of a business subsidies financing plan and when deemed appropriate by
the Housing and Redevelopment Authority, the developer shall provide any required
market and financial feasibility studies, appraisals, soil boring, information provided to
private lenders for the project, and other information or data as requested.
i 4:05 A recipient of a business subsidy must make a commitment to continue operations at the
site where the subsidy is used for at least five years after date of occupancy.
4:06 Recipients of any business subsidy will be required to meet wage and job goals determined
by the HRA on a case-by-case basis, giving consideration to the nature of the _
develo m the pu~ose of the subsidy, local economic conditions, situational~~
umstances. ` /
5. TAX INCREMENT PROJECT EVALUATION CRITERIA
5:01 The Housing and Redevelopment Authority will utilize Tax Increment Financing to
support the community's long-term economic~and housing goals.
5:02 Each Tax Increment Financing subsidy will be analyzed and evaluated by the Housing and
Redevelopment Authority. Each project shall be measured against the general criteria in
Sections 1 through 6 and the specific criteria in this Section 5 applicable to tax increment
financing business subsidies.
5:03 Following are the evaluation criteria that will be used by the Housing and Redevelopment
Authority.
2
•
HRA Business Subsidy Criteria
A. All business subsidy requests shall meet the "but for" test. The "but for" test
means that the project would not develop solely on private investment in the
reasonable future. The developer shall provide findings for the "but for" test.
B. Business subsidy requests should create the highest feasible number of jobs on site
from date of occupancy where deemed appropriate.
C. For manufacturing and warehousing business subsidy requests, at least 90% of the
jobs created must pay a wage of at least 160% of the federal minimu~ wa e
requirement for individuals over the age of 20. Annual written report ~'r quire
until termination date. Failure to meet the job and wage level goals require partial
or full repayment of the assistance with interest.
D . For other business subsidy requests, jobs created must me,~ a a ninimum the
federal minimum wage requirement. Annual written report ~ required until
termination date. Failure to meet the job and wage level goals require partial or
full repayment of the assistance with interest.
E. All business subsidy requests should create the highest possible ratio of property
taxes paid before and after redevelopment.
F. Business subsidy requests should facilitate redevelopment or elimination of
"substandard" or "blighted" areas where deemed appropriate.
G. Business subsidy requests should facilitate the "clean-up" of environmentally
unsound property where deemed appropriate.
H. Business subsidy requests should increase moderate priced housing options for
area residents where deemed appropriate.
1. All business subsidy requests should be deemed to promote additional desired
"spin-oft 'development.
All business subsidy requests should demonstrate "community involvement"
including demonstrated degrees of the various factors:
a) Local residency of the company's owners and employees, or
b) Local residency of the contractors involved in the project, or
c) Membership in local business organizations, or
d) Other similar factors.
HRA Business Subsidy Criteria
6. PROCEDURES
l he applicant will execute
Development Agreement accompanied by
Preliminary
* Building and site plans submitted to the Chief Building Official.
* If Zoni~p a
g g Commission action is required, it will be necessary for the
applicant, at this time, to make application to the Commission.
* Staff will authorize the following steps:
- Preparation for establishment of the Tax Increment Finance District and the Tax
Increment Financing Plan if required.
- Preparation of the Private Redevelopment Contract (Subsidy Agreement) based
upon agreed terms.
When action is required for the Tax Increment Finance Plan, Private
Redevelopment Contract, or Zoning/Ordinance; the Housing and Redevelopment
Authority, Commission, and City Council shall take appropriate action such as
public hearings and consideration of approvals.
* Building permit issued after the Tax Increment Finance District and Plan is
approved by City Council, the Private Redevelopment Contract is executed by the
developer and the Housing and Redevelopment Authority, and the Building Permit
• Fees are paid.
* Meet with appropriate Staffto discuss the scope of the project, public participation
being required, and other information as may be necessary.
* The request shall be reviewed by Staff on a preliminary basis as to the feasibility of
the project.
* The project concept shall be placed on the Housing and Redevelopment Authority
agenda for concept eview. The applicant will make a presentation of the project.
Staff will present it~findings.
* If the Housing and Redevelopment Authority's concept review is positive, Staff
will provide the City Council with an informational concept review.
4
C7
HRA Business Subsidy Criteria
Eligible Tax Increment Finance expenditures: Land acquisition, site improvements, public
improvements, and demolition and relocation costs.
Tax Increment Finance time: Generally six to eight weeks from time of authorization to begin
drafting plan and contract. '
Zoning/Ordinance time: Varies per project.
busub. Grit
5
.
.
.
/
// ~ /f7
/i~X '-b
.. \" \
City of Monticello
Ollie Koropchak
City Hall
P.O. Box 1147
Monticello, MN 55362-9245
Through June 30, 1999
MN190-00046 Soils TIF
Expenses
I declare, under penalty of law, that this
account, claim or demand is just and corr ct
and that no of it has been paid.
Signature of Claiment
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
July 20, 1999
Statement No. 3322
..~~.- -~.
;tq 31
---.
Total Current Billing:
278.00
0.00
278.00
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HRA Agenda - 8/11/99
8.
Consideration of Executive Director's Report:
a) TIF Authority and Municipal Reports and annual disclosure statement - To save time
I've include a copy of the Council agenda item, which submits the Authority Report to the
Council and informs them of completion and submission of reports on a timely fashion.
See Attached. Copy of the entire report will be available at the HRA meeting.
b) First-half of 1999 tax increment payments - Attached are copies of the reimbursement
checks for the pay-as-you-go TIF Districts which were mailed August 1, 1999.
Additionally, Larry ScWief received the annual principal and interest payment on the
Contract for Deed.
c) Non-payment of taxes - I believe I reported at the July 28 meeting that no taxes were
paid for the first half of 1999 for TIF Districts No. 1-15 (Custom Canopy) and No. 1-21
(T. 1. Martin, Inc.). Attached is a copy ofthe letter to T. 1. Martin relating to the
delinquent taxes and deficiency per the Contract. The letter was review by Attorney
Bubul prior to mailing. At this time, I've heard no response. Remember, this was up-
front assistance in the amount of $37,900. A letter was also addressed to T. J. Martin,
Inc. for non-payment ofthe EDA loan payback for the past three months. No letter was
issued to Custom Canopy as this is a pay-as-you-go assistance which is paid annually in
December per the Contract. No tax increment, no reimbursement.
(d) Allied Companies - Attached are the new TIF revenue runs after talking with the
County Assessor relating to the estimated market value of the land and building for
payable 2000 and the estimated market value beginning payable 2001 which will be the
value in the Assessment Agreement. As you can see with the Available Tax Increment at
80%, the loan at 7% is estimated to be paid back in year 2005 which is prior to the
termination date. Also, attached in the breakdown of number of jobs and wage ranges. I
have received copies of Lieu Waivers for the site improvements~ however, I have not had
time to review them. Bubul is preparing the amendments to the Private Redevelopment
Contract and suggested the City Council authorize execution of the loan documents to the
HRA. This is on the Council agenda of August 9 and he also suggested if there is an
outstanding mortgage, the Lender consent to acknowledge the Assessment Agreement.
e) Grassl 7-foot walkway - This item appears ofthe City Council agenda on August 9 for
authorization to purchase.
(f) Twin City Die Casting - Attached is letter mailed to the company. Site selection will be
the week of August 16. Monticello, Big Lake, and Buffalo in the running. In
Monticello, it appears the most desired site available is an easterly 6-acre site on the south
side of Chelsea Road. City Council received a copy of this letter so both government
entities are aware of financial assistance.
.
HRA Agenda - 8/11/99
(g) 230,000 sq ft building - Contacted this user looking for 20 acres of freeway exposure
property and informed them the property lying north of Chelsea Road is not on the
market.
(h) Outlot A, Country Club Manor - Wright County Commissioners approved the
reconveyance of this parcel to the State this week with the State expected to reconvey the
parcel to the HRA in the near future.
(i) Housing Study - I did receive a copies of Housing Studies from the City of Brooklyn
Park. A Senior Housing Study completed in January 1992 by Maxfield Research, a
Multifamily Housing Study completed in January 1994 by Maxfield Research, and
Residential Development Market Overview completed in April 1997 by Conhaim
Associates. I have not had a chance to review them nor to call Buffalo or Big Lake
relating to any current housing studies completed. Brooklyn Park's studies available for
review at HRA meeting.
G) City Budget 2000 - The HRA budget requests were submitted to Rick W olfsteller;
however, at this time no meetings between staff and council have been held.
.
(k) Rental property - Received $100 of the $550 August rent. Tammy appears very
determined and I expect to see the remaining balance due within days.
.
.
.
.
Council Agenda - 8/9/1999
?
Consideration to acknowledge receiving the Year-end 1998 TIF Authority and Municipal
Reports and Annual Disclosure. (O.K.)
A. Reference and Background:
This item appears on the Council agenda as an item of information to foster a better
understanding of Minnesota Statutory which requires an HRA and City to submit annual
TIF reports for each TIF District to the State Auditor, County Auditor, County Board,
School Board, and Municipality by August 1, 1999, and the annual disclosure statement
for publication in the local newspaper by August 15, 1999. The attached cover letters
advise you of the submission of reports on a timely fashion.
Rick has previously prepared these reports; however, this year the City purchased
software designed by Ehlers & Associates, Inc. from Ehlers. After the first year of
entering the data and learning the application of the software, future reporting will
consume less time. Once the current data is entered on the Authority and Municipal
Reports, the annual disclosure statement and pooled bonded indebtedness report are
automatically generated and printed. Great time saver with 22 TIF Districts to report.
It is not to say the HRA or City will not receive questions from the State Auditor about
the reports as in previous years. Although the reports are tedious, it does help to identifY
room for improvements such as the need to consider modification of some budgets as
expenditures are greater than the TIF budgets either by line-item or by district. Other
improvements to consider are improved management and recording of interfund loans and
amortization schedules. All-in-all small items to consider with 22 districts..
Since the City of Monticello is not the TIF Authority, the TIF Authority reports must be
submitted to the governing body of the municipality. Attached is a copy of one Authority
and Municipal report as an example. All the reports will be available at Council meeting.
B. Alternative Actions:
1. A motion acknowledging the receipt ofthe TIF Authority and Municipal Reports
and Annual Disclosure Statement for Year-end 1998.
C. Recommendation:
Alternative No.1.
D. Sup-porting Data:
Copy of cover letters and example of reports.
~ Ow}
,..
.
CITY OF MONTICELLO
GENERAL FUND
250 EAST BROADWAY
MONTICELLO, MN 55362
75-1664
---g;o-
NO.
45225
MARQUETTE BANK. MONTICELLO
P O. BOX 729
MONTICELLO. MN 55362
DATE
07/22/1999
CHECK NO.
45225
AMOUNT
$10,000.00
TEN THOUSAND AND 00/100 DOLLARS
PAY 10
THE
ORDER
OF
NAWCO ATTN: JOHN BABCOCK
H-WINDOW COMPANY
1324 E OAKWOOD DRIVE
MONTICELLO MN 55362
'-/}~.~
, .... (~/~. '. I
/,J~ . :.... I
. .. . .
, .. . .
- ( '. '.: :.:.':
. .... ..... )4. tv ...... ..::-j
. . -=---. ~.'. ..::..... ":.:"'~'~:".: :::....
1I-05b50711- 1:011 ~o ~bbL.71:
7 bOO 0 ~ 7 II-
213.46507.6511
TIF 1-7
10,000.00
.
TOTAL
10,000.00
CITY OF MONTICELLO
.
~ '0\
('
.
CITY OF MONTICELLO
GENERAL FUND
250 EAST BROADWAY
MONTICELLO. MN 55362
75-1664
---g;o-
NO.
45213
MARQUeTTE BANK. MONTICEllO
P O. BOX 729
MONTICEllO. MN 55362
OATE CHECK NO.
07/22/1999 45213
TWENTY THREE THOUSAND SIX HUNDRED THREE AND 53/100 DOLLARS
AMOUNT
$23,603.53
PAY 10
THE
OROER
OF
DEMEULES FAMILY LIMITED PTNSHP
207 DUNDAS ROAD
MONTICELLO MN 55362
--(;;;:j;._.~iJ
.. "..:.,,:.-,:{~~ 0-.. :/:.f/.':::::;.):::::.
. .' ".' ,., .....".. ..... 'u,.. ...... .. .....,
""
II' 0 5 b ... 11 511' I: 0 11 ~ 0 ~ b b ... ? I:
? bOO 0 ~ ? II'
IENDOR 000952 DEMEULES FAMILY LIMITED PTNSHP 07/22/1999
ACCOUNT I P.O. I INVOICE I DESCRIPTION I AMOUNT
CHECK
45213
213.46513.6511
TIF 1-13
23,603.5:;
.
"-
TOTAL
23,603.53
CITY OF MONTICELLO
.
~'o\
(
.
CITY OF MONTICELLO
GENERAL FUND
250 EAST BROADWAY
MONTICELLO, MN 55362
75-1664
----g;o
NO.
45229
MARQUETTE BANK. MONTICELLO
P O. BOX 729
MONTICELLO. MN 55362
DATE CHECK NO.
01/22/1999 45229
: FORTY THREE THOUSAND FOUR HUNDRED TWENTY ONE AND 20/100 DOLLARS
AMOUNT
$43,421. 20
I
\.
RIVER MILLS
c-o RDI - RICK MURRAY
15 CHOCTAW CIRCLE
CHANHASSEN MN 55311
PAY 10
THE
ORDER
OF
":~-"...:'::~~~~:.;...:.:J
"?:.::..>::::::.:~~': .t!;/ft!f1fi:.:::.: '.:;:):.::)
, . .' ." .. .... ............... .. ......
... ..... ,-", .- ..... ..
11-051; 5. .11- I:Oq 1.0 .I;b~ 71:
7 bOO O. 711-
213.46518.6511
TIF DIST NO 1-18
43,421.2C
.
\..
TOTAL
43,421. 2C
CITY OF MONTICEllO
.
~~
I'
.
CITY OF MONTICELLO
GENERAL FUND
250 EAST BROADWAY
MONTICELLO, MN 55362
75-1664
---g,o-
NO.
45227
MARQUETTE BANK. MONTICELLO
P O. BOX 729
MONTICELLO. MN 55362
DATE CHECK NO.
07/22/1999 45227
FOURTEEN THOUSAND ONE HUNDRED EIGHT AND 50/100 DOLLARS
AMOUNT
$14,108.50
PAY 10
THE
ORDER
OF
PRESBYTERIAN HOMES HOUSING
AND ASSISTED LIVING, INC
3220 LAKE JOHANNA BLVD
ST PAUL MN 55112-7997
/' .'. .'::.:71; w7~>f::::' :....,:,:,'~
, ,-,:/7~'~''''1
":"'::/'2' tuffl"::::" ....::...J',
." :.-... r r'\ J,. GL-\.' ,.... .
. .',. .:::~'~':.: ,:.'.:' " :.:.::::: ,:.:':::',:: :',::":':: :'::,
1110 5 b 50 '1111 I: 0 g .0 . b b ~ 71:
7 bOO O. 7111
!13.46519.6511
TIF 1-19
14,108.50
.
TOTAL
14,10e.50~
CITY OF MONTICELLO
.
<&\0
.
CITY OF MONTICELLO
GENERAL FUND
250 EAST BROADWAY
MONTICELLO. MN 55362
75-1664
9i'O
NO.
45233
MARQUETTE BANK. MONTICELLO
P O. BOX 729
MONTICELLO, MN 55362
DATE
07/22/1999
FIVE THOUSAND SEVENTY SIX AND 94/100 DOLLARS
CHECK NO.
45233
AMOUNT
$5,076.94
PAY 10
THE
ORDER
OF
LARRY SCHLIEF
122 KAMPA CIRCLE
MONTICELLO MN 55362
, . <2'~>J-
,"'"2!"'-- . .' :.
. ': :::.~: if .... :/:. :....::':,'/ :':.':.,:'::(,
, . . .. ...... .... ............ .
II' 0 5 b 5 ~ 5 II' I: 0 ~ ~ 0 U; b '-t 7 I:
7 bOO 0 ~ 7 II'
VENDOR 001619 LARRY SCHLIEF
ACCOUNT I P.O. I INVOICE I DESCRIPTION I AMOUNT
07/22/1999
CHECK
45233
13.46522.6511
TIF DIST NO 1-22
5,076.94
.
TOTAL
5,076.94
CITY OF MONTICELLO
L~
~~- ~~S
. ~~ ~Q-~
SC~)
~~~cs-k0L
~ ~.~t~~ .
'.
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..
August 2, 1999
MONTICELLO
Mr. Eric G. Bondhus, Vice President
T. 1. Martin, Inc.
1347 Dundas Circle
Monticello, MN 55362
Re: Contract for Private Development by and between T. 1. Martin, Inc. and the Housing and
Redevelopment in and for the City of Monticello dated April 1, 1997.
Dear Eric:
.
Upon the Housing and Redevelopment Authority of the City of Monticello receiving payment
from the Wright County Auditor's Office for tax increment collected the first half of 1999 for the
tax year until May 17, 1999; it was noted T. J. Martin, Inc. was delinquent on their tax payment.
Pursuant to ARTICLE VI, Tax Increment: Taxes, Section 6.1. Right to Collect Delinauent Taxes.
of the Contract (Attachment): The Developer acknowledged and understood that the tax
increment was intended to pay expenses of the Authority, agreed to pay real estate taxes,
recognized this created a contractual right for the Authority to sue the Developer to collect
delinquent real estate taxes and any penalty or interest and recover all entitled Authority costs.
Please consider this a notice by the Authority to T. 1. Martin, Inc. to remit to the County the
amount of the delinquent taxes plus penalty or interest. Please promptly notifY me when that
payment has been made. If the taxes are not promptly paid, the HRA retains the right to file an
action in order to collect the delinquent taxes directly from you.
Secondly, the Contract continues Section 6.3. Tax Increment Deficiencies. (Attachment): Ifon
any Payment date the amount of Available Tax Increment is insufficient for the Authority to
recover the Retention it is due on that Payment Date, the Developer shall pay to the Authority,
within 10 days of written demand by the Authority, an amount equal to the difference between the
amount of the Retention that the Authority was entitled to recover out of Available Tax
Increment pursuant to the Payment Table and the amount it actually recovered. ...........................
.
If the Developer had paid the real estate taxes on a promptly and timely basis, the deficiency
between the Available Tax Increment for the first half of 1999 and the Retention Amount due
. . ~ ~-
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245. (612) 295-2711 · Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (612) 295-3170 . Fax: (612) 271-3272
.
.
.
Mr. Bondhus
August 2, 1999
Page 2
August 1, 1999, is $1,491. Please consider this letter, the 10-day written notice to pay the
deficiency.
Should you have any questions, please do not hesitate to call me at 271-3208.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
a ~~ '\~ c0- tj ~~-~
Ollie Koropchak
Executive Director
Attachment
c:
HRA Attorney Steve Bubul
Wright County Auditor Doug Gruber
Mayor Roger Belsaas
TIF District 1-21 File
<? C,)
.
.
.
ARTICLE VI
Tax Increment: Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the
Authority is providing substantial aid and assistance in furtherance of the development. The
Developer understands that the tax increment intended to pay expenses of the Authority and the
Developer are derived from real estate taxes on the Development Property, which taxes must be
promptly and timely paid. To that end, the Developer agrees for itself, its successors and assigns,
in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated
by reason of this Agreement to pay before delinquency all real estate taxes assessed against the
Development Property and the Minimum Improvements. The Developer acknowledges that this
obligation creates a contractual right on behalf of the Authority to sue the Developer or its
successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon
and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority
shall also be entitled to recover its costs, expenses and reasonable attorney fees.
Section 6.2. Reduction of Taxes. The Developer agrees that prior to the date the
Authority is fully reimbursed pursuant to Section 3.6 of this Agreement (1) it will not seek
administrative review or judicial review of the applicability of any tax statute determined by any
Tax Official to be applicable to the Minimum Improvements or the Developer or raise the
inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax
proceedings; (2) it will not seek administrative review or judicial review of the constitutionality
of any tax statute determined by any Tax Official to be applicable to the Minimum Improvements
or the Developer or raise the unconstitutionality of any such tax statute as a defense in any
proceedings, including delinquent tax proceedings; (3) it will not cause a reduction in the
Minimum Market Value (as defined in Section 6.6) paid in respect of the Minimum
Improvements through: (A) willful destruction ofthe Minimum Improvements or any part thereof;
(B) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this
Agreement; (C) a request to the assessor to reduce the Minimum Market Value of all or any
portion of the Minimum Improvements; (D) a petition to the board of equalization of the County
to reduce the Minimum Market Value of all or any portion of the Development Property; (E) a
petition to the board of equalization of the State or the Commissioner of Revenue of the State
to reduce the Minimum Market Value of all or any portion of the Development Property; (F) an
action in a district court of the State or the tax court of the State pursuant to Minnesota Statutes,
Chapter 278, seeking a reduction in the Minimum Market Value of the Development Property;
(0) an application to the Commissioner of Revenue of the State requesting an abatement of real
property taxes pursuant to Minnesota Statutes, Chapter 270; (H) any other proceedings, whether
administrative, legal or equitable, with any administrative body within the County or the State
or with any court of the State or the federal government; or (I) a transfer of the Development
Property or Minimum Improvements, or any part thereof, to an entity exempt from the payment
of real property taxes under State law. The Developer shall not, prior to the date the Authority
is fully reimbursed pursuant to Section 3.6 of this Agreement, apply for a deferral of property
tax on the Development Property pursuant to Minnesota Statutes, Section 273.86. Nothing in this
Section 6.2 shall prohibit the Developer from challenging the assessor's valuation of the
Minimum Improvements to the extent that such valuation exceeds the Minimum Market Value.
DJGll1368
MN190-58
<(c.)
13
.
.
.
Section 6.3. Tax Increment Deficiencies. If on any Payment Date the amount of
Available Tax Increment is insufficient for the Authority to recover the Retention it is due on that
Payment Date, the Developer shall pay to the Authority, within 10 days of written demand by
the Authority, an amount equal to the difference between the amount of the Retention that the
Authority was entitled to recover out of Available Tax Increment pursuant to the Payment Table
and the amount it actually recovered. The Developer hereby acknowledges that the amount of
Available Tax Increment is subject to change in State law and calculation by the State and
County and that any such variation shall not impair the Authority's rights hereunder.
Section 6.4. Creation of TIF District. The Developer understands and acknowledges that
the financial assistance contemplated by this Agreement is contingent upon the creation of the
TIF District. The Authority shall use best efforts to create the TIF District, and a public hearing
on creation of the TIF District has been called by the City for November 12, 1996, but neither
the City nor the Authority warrants or guarantees that the TIF District will be created. If the TIF
District is not created by December 15, 1996, this Agreement shall be null and void and neither
party shall have any further liability hereunder.
Section 6.5. Qualifying Local Contribution. The Authority hereby covenants with the
City (such covenant not being for the benefit of or enforceable by Developer) that the Authority
shall allocate sufficient General Funds to the Retentions in accordance with Section 3.6(a) hereof,
it being the intention of the City and the Authority that such payment will constitute the
"qualifying local contribution" necessary to exempt the TIF District from local government
aidlhomestead and agricultural credit aid penalties pursuant to Minnesota Statutes, section
273.1399.
Section 6.6. Assessment Agreement. (a) Upon or after Developer's acquisition of the
Development Property and before commencement of construction of the Minimum Improvements,
the Developer shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota
Statutes, Section 469.177, subd. 8, specifying an assessor's minimum market value (the
"Minimum Market Value") for the Development Property and the Minimum Improvements
constructed thereon. The amount of the Minimum Market Value shall be $270,000 as of January
2, 1998 notwithstanding the progress of construction of the Minimum Improvements by such
dates.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
Exhibit D. Nothing in the Assessment Agreement shall limit the discretion of the assessor to
assign a market value to the property in excess of the Minimum Market Value. The Assessment
Agreement shall remain in force for the period specified in the Assessment Agreement.
DJGl1l368
MN190-58
~(.)
14
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6129335629
T-515 P.02/02 F-921
.
GOALS OF BUSINESS RECEIVING ASSISTANCE
Please indicate number ofempl(ryees at each level and indicate the corresponding benefit level.
Number of jobs created is over '!he first two years.
Job Creation Hourlv W aEe Hourlv Value
Level ofVoluntarv
Benefits (S)
Full-time Part-time (Exc1. benefits)
Less than $7.00
$7.00 to $7.99
$8.00 to $9.99
0.-. $10.00 to 511.99 ~ ~. L{-:J-
. I $12.00 to $13.99 ~~
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FILE COpy
July 27, 1999
--
MONTICELLO
Mr. Doug Harmon
Vice President of Finance
Twin City Die Casting Company
1070 33rd Avenue SE
Minneapolis, MN 55414
Dear Doug:
This letter is a follow-up to our telephone conversation of yesterday. The letter briefly explains
the TIF process and level ofTIF 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 ofland 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 market value of $28.44 per square foot for the building, the City of
Monticello is prepared 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 are due and payable in May and October of each
year. 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 of7.5%, 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.
~~
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245. (612) 295-2711. Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362. (612) 295-3170. Fax: (612) 271-3272
.
.
.
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.
Respectfully yours,
CITY OF MONTICELLO
D~ ~~Q~i1~
Ollie Koropchak
Economic Development Director
Enclosure
c: Mayor Roger Belsaas
File
~<;-
.
.
.
ATTACHMENT A
Example A.
52,000 sq ft tipwup 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.
~t:;..