HRA Agenda 11-03-1999
. October 29,1999
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TO: HRA Commissioners
Council Liaison Brian Stumpf
Rick W olfsteller
Jeff 0 'Neill
FROM:
Ollie Koropchak, Executive Director ~
SUBJECT: Due to the lack of agenda items needing immediate action, the HRA Chair and
Executive Director canceled the regular November 3, 1999 HRA meeting.
However, enclosed is the monthly Executive Director's Report. Should you have
any questions ofthe report, please call me at 271-3208. The next regular meeting
ofthe HRA is scheduled for Wednesday, December 1, 1999.
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HRA Agenda - 11/3/99
A.
Consideration of Executive Director's Report.
a) Brad Johnson - At the October HRA meeting, Brad Johnson addressed the HRA
on the demand and supply for rental retail/commercial property within the CCD
District. Because of the low demand and high supply for existing space, it is not
economically feasible to construct and cashflow retail/commercial rental property
without the assistance ofTIF. Johnson submitted a comparative cashflow
statement as evidence to back his statement. Koropchak reported because the
identified parcel located at West 7 Street and Locust was and is a vacant parcel, it
would be hard pressed to find eligible TIF expenditures: At least 90% of the
increment must be used to finance the costs of correcting conditions that allow
designation of redevelopment districts. Koropchak was directed to research the
potential to tie other substandard parcels into the project for use of redevelopment
dollars. Koropchak has notified Johnson as to the Attorney's response: Ifit's
determined that an adjoining parcel or a parcel across the street with a substandard
building is necessary for development of the project (such as needed parking), this
could quality. However, a North Anchor property would be a difficult finding.
Bubul, Ruff, and Koropchak will review the TIF District 1-22 Plan for the ability
to capture the tax increment from parcels receiving no TIF assistance.
b) 3 Walnut Street - October rent payment $195 received on October 13. $550 less
$195 equals $355 plus $50 late fee equals balance due as of October 27, $405.
c) 1 Locust Street - October 11, Council was asked to consider the HRA
recommendation to fund acquisition of the said substandard property at the
appraised value of $75,000. The Council approved acquisition of the property at
the 1999 assessed value of$61,400, based on condition of the property and
located outside 5-year redevelopment area. Commissioner Frie prepared a
purchase agreement accordingly which was presented to the owners, Timothy and
Nancy Holm, who counter-offered at $85,900. On October 25, the Council passed
a motion of no interest to acquire the property. I contacted the owners and
requested a consideration of a lower counter-offer. The owners were not
interested. Their son plans to live in the house and repair it; perhaps, next year the
house may be placed on the open market.
d) TIF District 1-24 St. Bens - Per the Private Redevelopment Contract the
construction of the minimum improvements for the 60-unit independent senior
housing complex must be completed by December 31, 1999. In talking to St.
Bens, due the difficulty of finding construction workers and delay of material and
supply deliveries, completion is expected in January or February, 2000. At the
December HRA meeting, the commissioners will be requested to authorize the
Executive Director to waive the completion date. The finance method of this
District is pay-as-you-go. The 60-unit assisted living complex is expected to open
in November.
e) TIF District No. 1-23 - The First Amended Private Redevelopment Contract is
now assigned to Midwest Graphics and Response Systems, Inc. JAC and
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HRA Agenda - 11/3/99
f)
Midwest Graphics both are liable for the Tax Increment Guarantee and only
Midwest Graphics is liable for the job and wage goals. The Assessment
Agreement will be recorded at the County this week. Closing and up-front TIF
dollars in the amount of$181,000 were disbursed on October 21, 1999.
TIP District No. 1-26 - The Council held the public hearing and approved the
establishment of TIP District No. 1-26 for Twin City Die Castings on October 25.
They also approved the Private Redevelopment Contract and Business Subsidy
Agreement for the TIF assistance and GMEF assistance. TWDC has executed the
contract. The Contract reads: 71 jobs at not less than $8.50 per hour excluding
benefits and 14 jobs at not less than $12.00 per hour excluding benefits by June
2002. This a conservative approach for sake of enforcement of the contract. The
Minnesota Investment Fund application is requesting $460,000. The company
will construct a 52,000 sq ft facility in two phases for completion by June 2002.
No building or site plans have been submitted to the City as of today.
Systematic Refrigeration, Inc. - Attached is the itinerary for the day the company
visited Monticello. The owner and general contractor were very impressed.
Attached is also a letter prepared after conservation and direction from the Mayor
and City Administrator relating to the City financial assistance offer. Our biggest
competition is Ramsey. The company plans to make its decision October 28 or 29.
Intercomp Company - The Prospect Team of Mayor Belsaas, Kevin Doty, Ron
Hoglund, Bob Murray, and Koropchak visited this Plymouth company on October
27. The company produces a diversified range of industrial scales for the space
center, military, air lines, automobile racing, and other industrial uses. The
company was non-committal to relocation plans or a site visit. Koropchak will
contact owner for planned visit to Monticello by siblings and perhaps later a visit
by workers. Looking at an approximate 60,000 sq ft building, optional lease or
ownership. Lead from AI Loch.
Ehlers & Associates - I'll be meeting with Mark relating to the need to modifY the
TIP budgets within the Plan of Central Monticello Redevelopment Project No. 1 as
identified in the Authority Reports to the State Auditor. Also will look at four-
year knock down rule and identifY districts for decertification in payable 2000.
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ITINERARY
SYSTEMATIC REFRIGERATION, me.
CITY OF MONTICELLO
Thunday, October 7,1999
GUESTS:
Ted Mateski, President, Systematic Refrigeration, Inc.
Ed Sorgatz, Olson General Contractors, Inc.
10:45 AM - The following people meet at City Hall- 250 East Broadway.
Ted Mateski
Ed Sorgatz
Roger Belsaas, Mayor
Client Herbst, Council Member
Rick Wolfsteller, City Administrator
Kevin Doty, Industrial Development Committee
Ken Maddux, St. Cloud Technical College
Jim Mecklenburg, Wright County Technical Center
Ollie Korocphak, Economic Development Director
?-q, 'S - 'Aq 13
11 :00 AM - Meet Pam Ringstad, High School Principal, to tour the industrial arts department of
the high school with follow-up discussion on technical training programs offered by the
representatives of the educational entities.
12:00 Noon - Lunch at Monte Club.
All the above with the addition of
Tom Ollig, Industrial Development Committee Vice Chair
Ken Maus, Economic Development Authority
Brad Barger, Housing and Redevelopment Authority
1:00 PM - Tour of City and proposed site.
Ted, Ed, Clint, Rick, Kevin, and Ollie.
Proposed funding package based on assumptions.
Next step.
2:00 PM - Return to City Hall.
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October 13, 1999
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MONTICELLO
Mr. Ted Mateski, President
Systematic Refrigeration, Inc.
11660 Troy Lane North
Dayton, MN 55369
Dear Ted:
Members of the Monticello Prospect Team enjoyed meeting you and Ed Sorgatz, Olson General
Contractors, Inc., during your site visit to the City of Monticello on October 7. Those of us, who
had the opportunity to visit the existing Systematic Refrigeration, Inc. facility, found your
manufacturing business to meet the goals and objectives of the City of Monticello.
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After consideration and based on your plans to construct a 60,000 square foot office and
manufacturing facility on approximately 8.5 acres ofland and your plans to create the job and
wage goals as discussed, the City of Monticello is prepared to offer up-front Tax Increment
Financing (TIF) assistance in an amount not-to-exceed $300,000 for land and utility trunk fee
costs. This offer is subject to a credit-worthy analysis of the company financial statements and
execution of a Contract for Private Redevelopment including an Assessment Agreement and Tax
Increment Guarantee.
Also, the City of Monticello is prepared to offer a $100,000 low-interest loan for real estate or
machinery/equipment.
In addition to funding programs, the City of Monticello offers amenities to meet the needs and
enjoyment of your employees and their families. Enclosed is the business card of Kitty Baltos,
Community Center Director, as promised.
Should you have questions regarding the offers, please do not hesitate to call me at 612-271-
3208. It is my suggestion, our next step is to meet with the State Department of Trade and
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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
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Mr. Mateski
October 13, 1999
Page 2
Economic Development, Lenny Kirscht, Charlie Pfeffer, a preferred lender, and the City Planning
and Building Officials.
I look forward to hearing from you.
Sincerely,
CITY OF MONTICELLO
()~ \<.0\ () \: J) ~
Ollie Koropchak
Economic Development Director
c: Roger Belsaas, Mayor
Rick Wolfsteller, City Administrator
Housing and Redevelopment Authority File