EDA Minutes 03-13-2013 (Special Meeting)MINUTES
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, March 13, 2013 — 5:00 p.m., Mississippi Room
Present: Bill Demeules, Bill Tapper, Tracy Hinz, Matt Frie, Rod Dragsten, Tom Perrault
Absent: Brian Stumpf
Others: Jeff O'Neill, Angela Schumann, Clint Herbst, Glen Posusta, Bruce Westby, Wayne
Oberg, Dan Wilson, Tammy Omdahl
1. Call to Order
Bill Demeules called the special meeting to order at 5:00 p.m.
2. Purpose
The purpose of the workshop is to provide status update about Block 34 and ask that the
EDA come to a decision as to whether it should be a "focus area" for use of EDA resources.
3. Status of Relocations
a. Tenant Lease Status - Angela Schumann reviewed the current relocation status of
tenants at the EDA -owned properties.
b. Cost -to -date - The EDA has paid $65,000 in relocation costs related to the
Montgomery Farms properties.
C. Potential total relocation costs — Angela Schumann noted that, in addition to actual
physical relocation costs, business reestablishment costs are eligible for
reimbursement. There is also a cost and some risk involved in maintaining empty
buildings. Dan Wilson estimated that total relocation cost for the three buildings
could be in excess of $400,000.
d. Building Vacancy - Two tenants remain in the Montgomery Farms properties. Once
the property is vacant, staff will need to contract to obtain a qualifying inspection to
determine findings for building status. Redevelopment must occur within three
years once buildings have been qualified.
4. Transportation Improvement Iundine
a. Construction Layout - City Engineer Bruce Westby provided an overview of the
intersection improvements proposed for Highway 25 and County Road 75.
The project would add dual left turn lanes on each approach except for northbound
25 in an effort to keep traffic moving through the intersection. There will be a
dedicated left turn lane from Highway 25 onto westbound 75 and two through
lanes. The right lane will be a combination through and right turn lane. Sherburne
County representatives have asked City staff to consider developing a phasing plan
Special EDA Workshop Minutes 3/13/13
which would allow for two through lanes on westbound 75.
b. Construction Costs- Intersection improvements are estimated to cost $695,000
million for Highway 25 and $955,000 for County Road 75. MnDOT has committed
to providing $450,000 for Highway 25 improvements. The City can also expect
$1.65 million in federal grant money to fund project construction costs.
C. Other project costs - Indirect costs are estimated to be an additional $512,000.
d. Timing - State funding will not be made available until July 2014. Federal grant
funding will not be made available until July 2016. The City would need to front
fund total intersection improvement costs to move forward at this time.
5. Redevelopment Opportunity
Block 34 is currently guided for commercial development. There was some discussion
about the option of including a housing component within a commercial project. There was
also some consideration of the option of redeveloping the block without a housing
component.
6. Financial Analysis
Tammy Omdahl of Northland Securities provided a summary of the financial analysis.
a. Estimated Redevelopment and Infrastructure Costs — Land acquisition costs, which
include relocation and right of way, will cost an estimated $1.4 million. Common
area development costs, which include demolition, hard and soft costs, will cost an
estimated $205,000. Street improvements will cost an estimated $2.1 million.
Commercial and housing development costs will be dependent upon the scope of
the project.
b. Available Funding Resources —As noted above, federal and state funding will be
made available in the next few years to pay for intersection improvements. The
EDA could choose to spend all available pooled funds from tax increment in TIF
1 -22 on redevelopment. The present value of the future estimated dollars available
is $1,005,000. The EDA could also pool an additional $816,000 in tax increment
from TIF 1 -22 for qualified affordable housing purposes. TIF 1 -6 has $591,000 in
tax increment funds available. The EDA might also choose to spend $597,000 of its
General Fund dollars on redevelopment.
C. Opportunities to Recapture Investment - The EDA could establish new TIF districts
for Block 34 to assist with development costs. This would involve removing
Special EDA Workshop Minutes 3/13/13
parcels within Block 34 from TIF 1 -22 and would impact those revenue estimates.
Future tax increment from new TIF districts could be used to repay the City /EDA
for tax increment eligible improvement costs or to provide assistance to a developer
for TIF eligible project costs. The present value of future tax increment for a
Redevelopment District for commercial development is estimated to be $275,000.
The present value of future tax increment for a Housing TIF District for housing
development is estimated to be $745,000.
7. Conclusions & Direction from EDA
The EDA will further consider this issue at an upcoming meeting.
Adiournment
The special meeting was adjourned at 6:00 p.m.
Recorder: Kerry Burri
Approved: April 10, 2013
Attest: ^
Jeff O'Neill, P ;f dministrator