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City Council Minutes 03-11-2013 SpecialMINUTES SPECIAL MEETING — MONTICELLO CITY COUNCIL Monday, March 11, 2013 — 6:00 p.m. Mississippi Room, Monticello Community Center Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf Absent: None Other: Angela Schumann, Jeff O'Neill, Bruce Westby, Ron Hackenmueller, Matt Theisen, Andy Martin (IRET Properties), Dan Miller (Miller Architects), Steve Feneis (Epic Properties — property brokers) 1. Call to Order Mayor Herbst called the special meeting to order at 5:52 p.m. 2. Purpose of Workshop: Monte Club Hill — Presentation by IRET Properties Jeff O'Neill explained that the purpose of the meeting is to hear from IRET Properties regarding potential development at the Monte Club Hill property. Council will be presented with some options at the end of the presentation and discussion. 3. Consideration of options for sale and development of property owned by the City known as the "Monte Club Hill" site Andy Martin of IRET Properties led off the presentation. He explained that they usually are involved with brokering property deals and not seeking new developments such as this. He noted that they own the Monticello Village Properties in Monticello and they are interested in expanding further in the Monticello community. They generally purchase and hold properties, keeping them as quality assets for their investors. IRET has been in business since 1970 and has many shareholders. Their concentration of properties is in the upper Midwest with 267 properties and 9934 units. Over 31% of the properties are multi- family units and the company holds over $2 billion in assets. Andy Martin talked about the buildings and amenities they provide with multi- family rentals, such as: central air, community picnic areas, 24 -hour emergency maintenance, lounge /community room, elevator, custom cabinets and granite countertops, fitness center, in -unit washer and dryer, community theater, keyless building access, open and screened decks, swimming pool, and underground heated parking. He talked about Quarry Ridge Apartments, which they recently built in Rochester, and showed pictures of the units. Brian Stumpf asked about what kind of research they do in a community such as Monticello to determine the need for apartments. Andy Martha mentioned that their Monticello Village complex is always full and they realize there is a need here for market rate apartments. Normally they will work with a research firm who looks at various City Council Special Meeting Minutes— March 11, 2013 Page 1 things such as demographics, rental availability. Brian Stumpf asked if they were looking for assistance from the City such as TIF financing. Andy Martin said they normally self - finance their projects. Their intent would not be to seek public dollars unless there was a need on the part of the city to develop land in a particular manner. Brian Stumpf asked how long their company holds undeveloped land before they build. Andy Martin stated that they purchase land with the intent to build immediately, although they may build in increments such as 150 units to start with and additional units later. Lloyd Hilgart asked if they have found development more feasible to build at this time due to the interest in apartment leasing. Andy Martin confirmed that is the case at this time. Dan Miller noted that this is probably due to a correction in the market from the overbuying of single family homes. Jeff O'Neill asked them to talk about their interest in the Monte Club Hill and whether there would be potential for other properties if that would not work. Andy Martin stated they want to build in this community. If the Monte Club Hill site was not available to them, he would want to know what the eventual use of the site would be so they would be aware of what the competition might possibly be. Jeff O'Neill asked if they feel they could demand higher rents if they located on the Monte Club hill. Andy Martin stated he feels it would command higher rates due to the location and view. Steve Feneis commented that their desire is to build a top level multi - family building which would be the nicest place in the community, if they can build on the Monte Club hill. If that didn't work out, they might choose a different design for the site they would choose as an alternate. Andy Martin noted that the most common demographics they draw at this time are females in their late 30's. Clint Herbst commented that he was not sure that he would favor the type of buildings that were shown in the slide presentation. He suggested that it might be helpful to see drawings of what they intend to build. He also noted he wasn't sure how much of the property the city would make available to a developer. Andy Martin stated that it would be important to them to know how much land would be available so they know what footprint they have to work with. It was noted they would probably need about 5 acres and would look at a building of 80 to 130 units. Dan Miller said they usually include underground parking so that would reduce the amount of acreage they use. They also discussed incorporating four floors into the building design. Lloyd Hilgart mentioned that he was not sure that he would want to see apartments located on the Monte Club hill site. He feels the apartment design they are discussing could be located in other places in Monticello and still command a quality clientele. Brian Stumpf indicated that he is not sure about putting apartments on the site either and feels it might be appropriate for commercial use. Clint Herbst commented that he thinks the Monte Club hill would be an ideal site for a high -end apartment building. Jeff O'Neill asked if they (IRET) would be interested in providing a pathway easement so that could be incorporated into the city's trail system. Clint Herbst suggested that would City Council Special Meeting Minutes— March 11, 2013 Page 2 probably be on the edge of their property and not necessarily through the middle of their property. Tom Perrault brought up a concern about the tower that is located on the hill, but noted he is willing to look at the potential for developing apartments on the hill. Glen Posusta is not convinced that apartments are the best choice for the top of the hill; he feels it might be better to look at developing owner- occupied condos on the site. Lloyd Hilgart thought it would be helpful for the city to scrutinize the property and determine how they would want to use the site and how buildings could be laid out. It was noted that there may be some concerns about the water pressure on the top of the hill. Matt Theisen informed the group that the hydrants in the surrounding area operate at 19 psi (pounds of pressure per square inch) and there would probably be about 50 psi available on the peak of the hill at ground level. Andy Martin mentioned that he was considering about 100 units for this building, which was based on what they felt was a good economy of scale for constructing on that site. They are not necessarily fixed on a specific number and would be willing to work with the city on building height and footprint. They would also make adjustments if needed for the water pressure. Lloyd Hilgart commented that it would be nice to have some high end apartments in the community and there is a market for it. Glen Posusta asked if they had any idea of what IRET would be looking at in terms of rent. Andy Martin noted that one bedroom units would probably be around $700 and two - bedroom units around $950 — these would be close to market rates. Council consensus was to request that IRET prepare a concept plan for their desired development on the Monte Club Hill. The Council would provide further direction after reviewing the concept plan. 4. Adjourn TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:36 P.M. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. Recorder: Catherine M. Shuman C Approved: March 25, 2013 Attest: Cif A�, Mstrator City Council Special Meeting Minutes— March 11, 2013 Page 3