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EDA Minutes 09-14-2016MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHOPUTY (EDA) Wednesday, September 14th, 2016 Mississippi Room, Monticello Community Center Present: Bill Demeules, Steve Johnson, Tracy Hinz, James Davidson, Tom Perrault, and Lloyd Hilgart Absent: Bill Tapper Staff: Angela Schumann, Jacob Thunander, Jim Thares, Wayne Oberg 1. Call to Order Bill Demeules called the meeting to order at 6:00 p.m. 2. Roll Call 3. Approve Meeting Minutes: a. Regular Meeting — August 10th, 2016 TRACY HINZ MOVED TO APPROVE THE AUGUST 10TH, 2016 REGULAR MEETING MINUTES. JAMES DAVIDSON SECONDED. MOTION CARRIED, 5 -0 WITH TOM PERRAULT ABSTAINING. 4. Consideration of additional agenda items Angela Schumann requested the addition of updating the EDA on the HRA levy approved at the September 12th, 2016 City Council Meeting. 5. Consideration of approving pavment of bills LLOYD HILGART MOVED TO APPROVE PAYMENT OF BILLS THROUGH AUGUST, 2016. STEVE JOHNSON SECONDED THE MOTION. MOTION CARRIED, 6 -0. 6. Consideration of Adopting Resolution 2016 -009 approving Amendment to Contract for Private Development between Masters 5` Avenue and the Monticello FDA related to Tax Increment Financing District 1 -35 and accompanying Resolution 2016 -010 approving a Modification to TIF Plan for TIF District 1 -35 Jim Thares stated Barry Fluth, President of Master's Fifth Avenue, provided plans with a proposed amendment to include a 23 -unit multi - family housing project. Thares noted a few corrections that needed to be made to the Modification No. 1 to Tax Increment Financing Plan for Tax Increment Financing District No. 1 -35 including removal of Section 32 and replacing the first paragraph of Section 2 -3 of the TIF Plan from three parcels to one parcel. An update was also applied to EDA Resolution No. 2016 -010 to change the date from March 10, 1997 to September 12, 2005. Lloyd Hilgart asked Fluth if any changes to the roofline or exterior were being proposed. Fluth stated that no changes were made, but changes are pending final approval from the City Council. Hilgart expressed concerns of the project warranting TIF as the City has rarely used TIF for completely residential projects. Angela Schumann reminded the EDA of previous discussions around the development stage PUD. The recommendation of City Staff and the Planning Commission was to change the siding from vinyl or steel siding to an EFIS or similar product, changing the rooftop on the garages, and changing the lighting and signage to a more urbanized appearance. The developer noted that some of the items were workable, where others required further discussion with City Staff. City Council minutes are available to refer back to for further details. Bill Demeules mentioned that the proposed language of the TIF 1 -35 amendment is specific and asked how flexible it would be to unanticipated changes. Thares noted any language that was approved would be binding and would require additional amendments if changes were necessary. Jim Davidson asked if the building could be changed in the future to another use and still receive TIF funding. Thares stated in order to receive TIF, the owner would need to stay within the language noted in the plan until the expiration of the district. Steve Johnson noted concern with density of the proposal and asked for the project to be scaled back. LLOYD HILGART MOVED TO APPROVE THE ADOPTION OF RESOLUTION 2016 -009 APPROVING THE 4TH AMENDMENT TO THE CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN MASTERS FIFTH AVENUE AND THE MONTICELLO EDA AS IT RELATES TO TIF DISTRICT 1 -35 WHEREIN LANGUAGE INCLUDES AN "11,000 SQUARE FOOT COMMERCIAL RESIDENTIAL OR MULTI -USE CENTER ". TRACY HINZ SECONDED THE MOTION. MOTION CARRIED 4 -2 WITH STEVE JOHNSON AND JIM DAVIDSON VOTING AGAINST. Further discussion ensued regarding the flexibility of the project with the proposed modification to the TIF Plan. Tracy Hinz questioned the age restrictions of the proposed project. Thares stated there is no contractual agreement for the age of tenants, but would ensure the amended language would emphasize that the property is targeted, but not limited to people 55 years and older. Fluth reiterated this intent. Schumann stated that the EDA could table any modification to the TIF Plan, if desired, until the developer is ready to start construction. Davidson noted concern with slowing the development down by tabling action. TRACY HINZ MOVED TO TABLE RESOLUTION 2016 -010 APPROVING A MODIFICATION OF THE TIF PLAN FOR DEVELOPMENT OF A 23 UNIT RESIDENTIAL APARTMENT COMPLEX IN TIF DISTRICT 1 -35 PENDING INFORMATION FROM THE CITY ATTORNEY. LLOYD HILGART SECONDED THE MOTION. Further discussion regarding the specific language in the proposed TIF Plan modification followed. Thares stated if the EDA decided to table action, City Staff and the EDA Attorney would use the additional time to review the documents to ensure the verbiage for the TIF Plan modification is consistent with the Private Development Contract wherein the desired flexibility is maintained. He further noted that if the modification to the TIF plan is approved as currently written and additional changes to the development would occur such as commercial or mixed use development being proposed by the developer, another additional step of approval from the EDA would be required. Tracy Hinz rescinded her motion, with motion seconder consenting. TRACY HINZ MOVED TO APPROVE RESOLUTION 2016 -010 APPROVING A MODIFICATION TO THE TIF PLAN FOR TIF DISTRICT 1 -35 WHEREIN LANGUAGE IS INCLUSIVE OF COMMERCIAL, RESIDENTIAL, AND MIXED USE AND PENDING CONSULTATION WITH CITY STAFF AND ATTORNEY FOR ADDITIONAL CHANGES TO RESTRICTIVE LANGUAGE TO PROVIDE MAXIMUM FLEXIBILITY FOR THE DEVELOPER. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED, 6 -0. 7. Consideration of Adopting Resolution 2016 -011 approvinM First Amendment to the Purchase and Redevelopment Contract between the EDA and Taylor Holdings, LLC for 413 — 4t' Street West Jim Thares noted there was a historic assessment recorded against the 413 4th Street West property. The assessment was for cleanup and demolition costs. The City Attorney recommended extending the timeline for the purchase agreement, which would allow the City Council to change, waive, or enforce the assessment at the September 26th City Council Meeting. Thares stated the EDA may want to consider changing the purchase price depending on the cost of the assessment at their next meeting on October 12th. The closing would be scheduled for October 18"'. Steve Johnson asked who paid for the demolition and cleanup. Bill Demueles stated the EDA paid for those costs. The assessment was placed by City Council on the property so that specific development would be conducted at the site. If the desired project would be constructed, the assessment was to be forgiven. STEVE JOHNSON MOVED TO ADOPT RESOLUTION NO. EDA 2016 -011 APPROVING A FIRST AMENDMENT OF A PURCHASE AND DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND TAYLOR HOLDINGS, LLC. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED, 6 -0. 8. Public Comment Session - Outdoor Storage Standards in Otter Creek Business Park; Consideration of Allowing Limited Outside Storage in Otter Creek Business Park Jim Thares stated the initial idea of allowing a limited amount of outdoor storage was proposed by Groebner, Inc. At a prior EDA meeting, it was recommended that City Staff send letters to the businesses located in Otter Creek Business Park to provide comments and attend the EDA Meeting. Mary Barger, Suburban Manufacturing, commented about her concerns for allowing outdoor storage. Suburban Manufacturing is located in the Otter Creek Business Park. Barger noted that outdoor storage detracts from the quality, aesthetics, and property values of businesses located in the business park and expressed appreciation to keep the business park covenant restrictions in place. Lloyd Hilgart asked if outdoor storage is allowed in this park. City staff noted no outdoor storage is allowed. Hilgart asked if outdoor storage was taking place. City staff stated it was occurring. Hilgart asked how much land is available for industrial development and if other parcels were available for the business to build at. Angela stated there is limited industrial land in the City; she believes there is less than 80 acres remaining. She also noted that there are areas identified as Industrial /Business Campus in the City along 7th Street, but they are guided commercial. In the long term, available industrial land is shrinking. Thares stated that Groebner has looked at other sites in the City and has discovered that all of the remaining lots are too narrow. Tracy Hinz expressed appreciation for Suburban Manufacturing commenting on the request and inquired as to the opinion of the remaining businesses in the Park. Thares stated one business noted that they were okay with the change and two businesses did not have a preference either way. Steve Johnson asked if there were areas in the City that could be similar to Otter Creek Business Park, but would allow outdoor storage. Schumann stated there are areas planned for industrial development throughout the City, however infrastructure and utility improvements would need to occur. There are also other lots currently available where outdoor storage is allowed including Oakwood Industrial. JIM DAVIDSON MOVED TO NOT RECOMMEND TO THE CITY COUNCIL FUTURE RESTRICTIVE COVENANTS THAT ALLOW LIMITED OUTSIDE STORAGE. LLOYD HILGART SECONDED. MOTION CARRIED, 6 -0. 9. Consideration of Economic Development Assistance Contract with WSB & Associates for lead generation and financial assistance packaging consultation Jim Thares noted this item was considered at the regular EDA meeting on August 10th. It was recommended that a representative from WSB be present to answer questions about the proposed contract to the City of Monticello's EDA. The proposed contract is proposed for a term running from October 2016 through December 2017 for $10,500. Jim Gromberg, WSB, stated he met with Jim Thares to discuss the contract so that it meets the changing needs of the City of Monticello's EDA. Gromberg discussed how WSB could augment the EDA including attending meetings. These meetings are typically held in the Twin Cities area and require individual membership to be able to attend. WSB is also able to network with site selectors and businesses who are looking for projects and can help attract and work with existing businesses in Monticello. Bill Demueles asked what the cost of membership to different organizations would be if Monticello were to do this on their own. Gromberg stated that alone in economic development organizations the costs would be $50,000- $100,000, without staff time. With this proposal, WSB would also help the City of Monticello develop proposals and marketing. Tracy Hinz asked who would be the liaison from WSB on this contract. Gromberg confirmed he would_ be representing the City of Monticello. Steve Johnson asked how the City of Monticello would utilize the tools that WSB would provide. Thares stated he would stay in constant contact with Gromberg and would ask them to provide regular updates to the EDA at the meetings. Hinz expressed concern with the amount of services that would be provided at the $700 per month cost. Gromberg noted the proposed services and scope are significantly slimmed down from the previous market snatching service that was provided by WSB the past two years. Gromberg noted WSB would be able to fulfill all obligations in the contract, but would possibly need to discuss a change if a major project would require more involvement by WSB. TRACY HINZ MOVED TO ACCEPT THE PROPOSED ECONOMIC DEVELOPMENT ASSISTANCE SERVICES SCOPE OF WORK AND FURTHER DIRECT PREPARATION OF A 15 -MONTH CONTRACT FOR ECONOMIC DEVELOPMENT ASSISTANCE SERVICES BETWEEN WSB & ASSOCIATES AND THE MONTICELLO EDA. STEVE JOHNSON SECONDED. THE MOTION CARRIED, 5 -1 WITH TOM PERRAULT VOTING AGAINST. 10. Consideration of authorization to issue RIFPs for Small Area Study in downtown Monticello Angela Schumann said the EDA has had a number of discussions over the past few years regarding the EDA's direction. The EDA has mentioned their primary focus would be the development and revitalization of the downtown. There have been discussions with the EDA regarding the constraints of the current Embracing Downtown plan. The plan is still an actively used plan especially the components of the transportation section, market study, and design guidelines. Broader concepts of the land use plan have also been utilized, but given recent investments in the downtown area, many things have shifted away from the plan. The proposed Request for Proposal (RFP) would include focusing on a specified core area of the downtown. There would also be a market component of the plan, which would include three alternative, market- tested concepts for this core area. Schumann also stated the importance of incorporating the updated plan back into the Embracing Downtown Plan, which may require additional updates to sections such as `Design Guidelines'. Schumann stated there have been funds set aside to pay for this project. Bill Demueles asked if the consultant would make a presentation to the EDA before final selection. Schumann stated a selection process is included in the RFP, but could be re- written to include the entire EDA rather than a selection committee. Demueles asked if the $45,000 to $55,000 would be enough funds to cover the completion of the plan. Schumann stated in the RFP, the City of Monticello reserves the right to waive any irregularity in any submittal or reject any or all proposals. Schumann also noted a consultant that works with both private and public clients would help to weave both viewpoints in the proposed plan. Jim Davidson asked if City Staff would have the time and experience to complete the update in house. Schumann stated City Staff have the education and background to draw a land use plan and make amendments to the existing plan, but developing three alternative market tested concepts that maintain an unbiased view would be a different question. Tom Perrault mentioned he would like to add the hotel study in the resources portion of the RFP. Schumann confirmed that would be done and also mentioned the addition of the inclusion of the wells on Block 34 and the TIF 1 -35 update. Lloyd Hilgart questioned whether the EDA and the City Council would be able to implement a significant plan to the downtown. Schumann asked if it would be valuable to meet and discuss the initial challenges of the Embracing Downtown plan and a clarity of the expectation of what would want to be achieved in the update. Schumann also asked how the EDA would like the City Council involved with the selection process. Hilgart and Tracy Hinz agreed it would be a good to discuss the challenges and expectations. Steve Johnson stated he would like to move ahead in working with the RFP on refinements before releasing it. Demueles, Davidson, and Hinz were in agreement as to inviting the City Council and other City boards to be present during the selection process. TRACY HINZ MOVED TO AUTHORIZE ISSUANCE OF RFPS FOR A SMALL AREA STUDY IN DOWNTOWN MONTICELLO, SUBJECT TO THE COMMENTS OF THE EDA. LLOYD HILGART SECONDED THE MOTION. MOTION PASSED, 5 -1, WITH TOM PERRAULT VOTING AGAINST. 11. Consideration of authorization to seek quotes for completion of a Phase Il Limited Site Investigation (LSI) on Block 34 Jim Thares stated during the City 2016 Street Reconstruction and utility replacement work, an area of contaminated soils was discovered in Block 34. This finding was reported to the MPCA and a Leak File was opened as #020142. As a next step, the MPCA is requiring a Limited Site Investigation (LSI) be conducted on the property. Thares stated there is a 10 -month timeframe to complete the LSI or consequences would ensue. Lloyd Hilgart asked why the City wouldn't move forward with collecting three quotes to receive the 90 percent reimbursement instead of the 80 percent of the eligible costs. Thares stated because of the familiarity with WSB's work, it may be a good fit for efficiency to have theirs complete the work, but could also understand collecting three quotes. Steve Johnson asked if the site was a high priority site. Thares responded that this is not a high priority site; the allowed timeframe is 10 months to complete the LSI. Johnson asked if it was possible to complete the LSI by May 2017. Thares stated it could be completed by then and may be possible to accomplish yet this fall. Bill Demueles noted that the consultant could be selected at the October EDA Meeting following the proposal deadline. STEVE JOHNSON MOVED TO AUTHORIZE STAFF TO SEEK QUOTES FROM QUALIFIED ENVIRONMENTAL ENGINEERS TO CONDUCT A LIMITED SITE INVESTIGATION (LSI) RELATED TO LEAK #20142 ON EDA OWNED PROPERTY IN BLOCK 34. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED, 6 -0. 12. Consideration of conceptual ioint funding proposal (GMEF Loan) with Initiative Foundation for We Thrive Fitness Jim Thares recalled that We Thrive Fitness purchased the building from Fred's Auto. They have obtained preliminary approval for an $80,000 loan to help finance the purchase, however an additional $50,000 is still needed. The owner, Hallie Leffingwell, has indicated she would be interested in pursuing the City's GMEF loan fund and would be willing to inject the required 10 percent equity portion of the project funding, a total of $13,000. The Initiative Foundation has indicated they are willing to provide a loan of $18,500, if the EDA would also fund a loan of $18,500. An inter - creditor agreement would also be executed in this funding arrangement as the EDA and the Initiative Foundation would both share a second lien position on the real property. Bill Demueles noted that there are certain requirements to apply for the GMEF including increase in jobs or property values. Schumann also noted the City has not issued a GMEF loan in quite some time and that all previously funded GMEF loans are now closed. The EDA members agreed that this seems to be a reasonable way to proceed. The EDA has the tools available for them to be successful and staff should move forward with the funding proposal. 13. Consideration of Director's Report Jim Thares provided an update from the City Council Meeting on September 12th. The City Council approved the final HRA Levy of $280,000, a difference of $22,000 from the recommendation of $302,000 provided by the EDA. It was noted the land sales could help to fill in the $22,000, but in the past, the budget has not been completely used. Angela Schumann reiterated the importance of communicating with the City Council. She also noted at the last City Council report it identified different ways to communicate with the Council and that information would be provided in a future director's report. Thares also mentioned there was a large international firm that is completing a site search. The City has offered a few possible locations for this company. Thares stated he is working with WSB on marketing the Monticello community. Steve Johnson asked if an update could be provided at the next EDA meeting. Johnson asked about the marketing piece that was proposed by the Monticello Times. Thares stated the City has been allotted about 7 -8 pages for informational content. The piece will be available in digital and paper copies by October 1St 14. Adiourn TOM PERRAULT MOVED TO ADJOURN THE MEETING AT 8:35 P.M. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED, 6 -0. Recorder: Jacob ThunandeP6F Approved: October 12"', 20 Attest: Thares, Economic Development Director