HRA Minutes 01-03-1989MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Tuesday, January 3, 1989 - 7:00 PM
City Hall
MEMBERS PRESENT: Acting Chairperson Al Larson, Lovell Schrupp.
Ben Smith, and Everette Ellison.
CITY STAFF PRESENT: Administrator Rick Wolfsteller, Assist
Administrator Jeff O'Neill, and HRA
Director 011ie Koropchak.
1. CALL TO ORDER.
Acting Chairperson Al Larson called the HRA Annual meeting
to order at 7:05 PM.
2. APPROVAL OF THE DECEMBER 7, 1988 HRA MINUTES.
Lovell Schrupp made a motion to approve the December 7, 1988
HRA minutes, seconded by Everette Ellison the minutes stood
approved as read Without further discussion. Approval 4-0.
3. CONSIDERATION TO APPROVE THE MODIFICIATION OF THE REDEVELOPMENT
PLAN RELATING TO REDEVELOPMENT PROJECT @1, MODIFICATION OF THE
TAX INCREMENT FINANCE PLANS RELATING TO TAX INCREMENT DISTRICTS
NOS. 1-1 THROUGH 1-7 AND THE APPROVAL AND ADOPTION OF THE
TAX INCREMENT FINANCE PLAN RELATING TO TAX INCREMENT FINANCE
DISTRICT NO. 1-8, ALL LOCATED WITHIN REDEVELOPMENT PROJECT dl.
Mr. Pat Pelstring of Business Development Services, Inc.
was present at the HRA meeting and informed the members
that a few slight changes were made of modification documents
of a couple Weeks ago. The new defined boundaries for the
Central Monticello Redevelopment Plan, Project it basically
included the total city limits with the exception of R-1 and
R-2 zoning unless potential future redevelopment was foreseeable
as river development or blighted areas within these areas.
Mr. Pelstring informed the HRA members that the District 08
Finance Plan Budget was increased to $34,000 to allow a leeway
for the potential lose of revenue because of the unknown
1989 tax capacity rate. BDS has been Working with Dougherty
Dawkins to finalize the dollar amount made available by
combining the seven tax increment finance plan into one finance
plan. Preliminary estimates indicate this could free up
$150,000 of reserve funds and additional monies could be made
available through refinancing the District's G.O. Bonds.
Mr. Pelstring encouraged the HRA approve the resolution
approving the two modifications and adopting the Tax Increment
District No. 1-8 Finance Plan to comply with statutory
authorization and to meet the original goals set by the
` HRA. Everette Ellison made a motion to approve the Modification
of the Redevelopment Plan relating to Redevelopment Project ®1,
Modification of the Tax Increment Finance Plans relating to
Tax Increment Districts Nos. 1-1 through 1-7, and the approval
and adoption of the Tax Increment Finace Plan relating to Tax
HRA Minutes - 1/3/89
3. CONTINUED.
INCREMENT FINANCE DISTRICT N0. 1-8, ALL LOCATED WITHIN
REDEVELOPMENT PROJECT O1. Ben Smith seconded the motion
and with no further discussion the motion passed 4-0.
Koropchak asked Mr. Pelstring about the HRA's role in providing
a higher quality of housing for the elderly (example townhouse
close to downtown area). Mr. Pelstring's response was if
a Housing District was created than Statutory reads that 2/3
of the units must to available to low and moderate income.
He suggested that if at all possible to tie the project with
a blighted area therefore being able to create a Redevelopment
District which is not limited to low and moderate income.
Mr. Pelstring will inform or check with potential interested
developers regarding the HRA's interest to provide a higher
quality of housing (townhouses) for the elderly within walking
district of shopping, churches, etc. The HRA may also publicize
for a Request for Proposal. Mr. Pelstring cautioned the HRA
that rental development allows for the developer to be in the
deal therefore guarantees the increment. Also, he suggested
the developer provide two per formas with the use of Tax Increment
Finance and without Tax Increment Finance.
Mr. Pelstring informed the HRA that he is working with Dougherty
Dawkins (muncipal bond writer) to assist him with the research and to
advise of the most beneficial options of refinancing the
General Obligation Bonds of the current seven Tax Increment
Districts. Mr. Pelstring will meet with City staff and thereafter
at the February 1st HRA will present the commissioners with a
proposal inclusive of options and policies for refinancing.
Mr. Pelstring advised the HRA that his work time is still
within the 65 hours not to exceed contract.
4. CONSIDERATION TO SELECT AND RECOMMEND A NEW HRA MEMBER FOR
MAYOR AND CITY COUNCIL APPOINTMENT AND TO RECOMMEND CURRENT
HRA MEMBERS FOR MAYOR AND CITY COUNCIL ANNUAL APPOINTMENT.
Koropchak informed the HRA members of the live letters mailed
to potential HRA candidates: Mr. Kendall, Mr. Drayna, Mr. St.
Hilaire, Mr. Mayer, and Mr. Pribyl; positive responses were
heard from Mr. Drayna and Mr. St. Hilaire. The members
recognized the public interest both candidates possess,
dicussed the flexiblity of Mr. Drayna's time with Snvolvment
of school athletics. Mr. St. Hilaire has expertise in
finance/ investment and as anindependent consultant his time
is more flexible. Ben Smith made a motion to recommend
Mr. Tom St. Hilaire to fill the vacated HRA position with
an expiration date of December 1991 and Mr. Al Larson for
a second term with an ewpiruLluu dace of December 1993
for Mayor and City Council appointment. Everette Ellison
seconded the motion and with no further discussion the motion
passed 4-0. Mr. St. Hilaire was recommended because of
his expertise in finance/investment and flexibility of time.
c
HRA Minutes - 1/3/89
5. CONSIDERATION FOR USE OF TIF FOR MARTIE FARM SERVICES.
Mr. Russ Hartle contacted the HRA office and requested the use of
Tax Increment Financing for his proposed development of a
7,164 metal facility (construction in 1990) on the westerly
1.936 acres of Lot 1, Block 3, Oakwood Industrial Park.
Estimated land purchase date is 1989. Retention of current
employment plus additional 2. Although, Mr. Hartle's operation
currently is commerical he would be classified as industrial
by the installation of bird seed production equipment. He
request TIF to write down the land cost, however. I did
advise him that to purchase the land is 1989 and certify
a tax district and construction in 1990 would be a loso
of one year of collectible increment. If the development
met TIF requirements the HRA's consensus was to assist
Mr. Hartle with TIF because the commissioners are interested
in assisting small local existing businesses with expansion.
6. CONSIDERATION OF TIF DISTRICT 92 UPDATE.
The HRA members accepted the written report in the agenda
supplement.
7. CONSIDERATION TO REVIEW CONSTRUCTION FIVE REVISED SITE PLAN
AND USE OF TAX INCREMENT FINANCE.
The November 14 City Council minutes read: It was the con-
sensus of the Council that using tax increment financing
for the installation of a storm sever was undesirable.
After notifying the developers, Gus and Cary LaFromoise, of the
City Council's decision, they requested the HRA hear their rationale
of why this project is a good use of tax increment financing.
Mr. Gus LaFromoise pointed out these reasons:
1. Increased aesthetic value.
2. Potential of 40-60 jobs.
3. Wants to be treated the same as other developers.
4. Benefits to the City were previous extension of Lauring
Lane and donation of park land.
5. Sufficient tax increment to retire the debt service.
6. Local taxpayer must compete with subsidized rental.
7. Better utilization of land.
8. Increase In local tax base.
9. Potential business expansion of 16 leased bays.
10. Some storm sever maintenance to City, but not a lot.
11. Not feasible to reduce the project.
The project includes the construction of a 18,180 aq ft office/
warehouse (9 bays for lease), the construction of a 13,900 sq
ft office/warehouse (7 bays fur lease), construction of two
block mini stroage facilities, one 5,600 aq ft and the other
8,400 sq ft. Total estimated market value is ;1,174,000 with
a projected annual tax increment of $46,000.
HRA Minutes - 1/3/89
7. CONTINUED.
Jeff O'Neill had videoed the similiar development in Long Lake.
however, the commissioners felt comfortable with the concept
by the displayed photos. Koropchak reported she had telephoned
the property manager of the Long Lake development and was
Informed the average employment of each bay was 7-8 persons
and approximately 60% of the businesses were from other locations
other than Long Lake.
Mr. Wolfsteller reiterated the Council's concern of the storm
sewer's installation: the depth of the pipe, the impact with a
stacking effect in conjunction with the current sanitary sewer,
loss of ground water absorption, and additional maintenance
coat.
Although, the HRA does agree to some degree with the Council's
rationale, they did consider the project to meet the TIF
objections of a substantial increase to the local tax base,
creation of 40-60 jobs, increase of aesthetic value, and public
utilities are legitimate use of TIF.The HRA did agree that
developers should be treated the same and developers of rental
property compete with subsidized rental units. Lovell Schrupp
made a motion to consider the use of Tax Increment Financing
for the 516.5 ft plus connection of 60 inch storm sewer (estimated
Ic #70,000) installation and the 285 It of 30 inch storm sewer (#20.000) along
Laurirg Lane exclusive of any other developer's project cost
and with Lite developers guarantee to construct the buildings planned
as presented for review and described above. The motion was
seconded by Everette Ellison and without further discussion
passed 4-0.
8. CONSIDERATION TO SET 1989 HRA COALS.
A subcommittee of Acting Chairperson Al Larson, HRA Director
011ie Korpchak and Assist Administrator Jeff O'Neill was appointed to
establish the 1989 goals for recommendation to the HRA members
for approval at the February 1 meeting.
9, OTHER BUSINESS.
It was suggested that Koropchak mail Mr. St. Hilaire, after appointment
by the Mayor and Council, a copy of the previous six months HRA
agendas and minutes.
10. ADJOURNMENT.
The NRA meeting adjourned at 10:15 PM by a motion from Everette
Ellison and seennded by Ben Smith.
011ie Koropchak
HRA Executive Secretary