HRA Minutes 03-22-1989MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, March 22, 1989 - 7:OOPM
MEMBERS PRESENT: Chairperson Al Larson, Lovell Schrupp, Ben Smith,
Everette Ellison, and Tom St. Hilaire.
CITY STAFF: Jeff O'Neill, Assist Administrator
011ie Koropchak, HRA Director
GUEST: David Ficek, Scottwood Corporation
1. CALL TO ORDER.
The HRA meeting was called to order at 7:03PM by Chairperson
Al Larson.
2. APPROVAL OF THE FEBRUARY 1 AND FEBRUARY 21, 1989 HRA MINUTES.
A motion was made by Lovell Schrupp to approve the February 1
and February 21, 1989 HRA minutes, seconded by Ben Smith,
the minutes were approved unanimously as written.
3. CONSIDERATION OF A DISCUSSION WITH POTENTIAL DEVELOPERS ON THE
QUALITY ELDERLY TOWNHOUSE CONCEPT.
Chairperson Al Larson summarized the development process of the HRA
goal for higher quality elderly housing close to downtown
with a townhouse concept. The information Introduced David
Ficek of Scottvood Corporation to the HRA's objectives.
Mr. Ficek presented his concept and site plans of townhouse
models based on projects in Roseville, Columbia Heights, and the
proposed project in Princeton. The uniqueness of townhouses
is individual ownership and maintenance free exterior. Mr.
Ficek outlined that the general townhouse model is 1,198
square feet with double garage, full basements, quality carpet (E13),
solid oak cabinets, 10 ft living room ceiling, excellent
Insulation, first floor laundry, irrigation system, and
formal or informal dining room. Options are deluxe bathroom,
fireplace and three season porch on portion of 12 x 12 deck.
Mr. Ficek informed the HRA that in the metro area this concept
would market for approximately $90,000 and in Princeton for
approximately $72,500. Mr. Ficek informed the HRA the assistance
provided by the HRA is passed through to the consumer by
the developer and is a benefit to the buyer and the rate of
return is the same for the developer. Example: if the
HRA assisted in demolition and some land cost writedown this
could be a reduction of $8,000 per unit sold. The example
was given by estimated land values in Princeton. The consensus
of the HRA was the Mr. Ficek's concept coincides with that
of the HRAs and encouraged Mr. Ficek to view the site options
selected by Ben Smith, Al Larson, and Jeff O'Neill. Mr.
1C O'Neill or Koropchak will contact Mr. Ficek. Mr. O'Neill
presented a map of the site options to the HRA along with
a partial list of property owners and market values which
HRA Minutes - 3/22/89
3. CONTINUED.
will be completed for the next HRA meeting.
4. CONSIDERATION TO REVIEW TIF POLICIES AND PROCEDURES.
Mr. Pat Pelstring summarized the Tax Increment Policies and
Procedures in three categories: 1) Public purpose which are
subjective uses for the use of TIF or the inverse of why
deny the use of TIF. 2) Policy Guidelines are standard
issues on how to proceed or what are the recommended structure
for TIF assistance, and 3) Internal Procedures which specifies the
standard TIF aprocess. Mr. Pelatring elaborated Policy Guidelines
stating theylstandards and are not locked in recommendations.
Additions or corrections made: a) All shells shall be changed
to mays, b) Rate to be set by the NRA and up for review, c)
first offe='should include loan If available project increment,
4) office/commercial projects include accepted area market
values and market rate interest. 5) housing project loan
demostrate to the NRA that the benefits are passed through
In reduced rents and/or purchase costs. The excess increment
monies from the combination of the seven TIF Districts is
for small projects unable to support themselves or to eliminate
blight without a planned development. All TIF projects are
strongly recommended to stand on their own. Policy Guidelines
No. 2, maximum is changed to standard terms and amortized
from 8 to 13 years with length of 25 years. No. 3, is a
standard guideline, No. 4, site preparation and improvement,
are hard surface of parking lots included in site improvements, this is
case by case review by bond counsel and generally are considered
if the parking lot Is used as an access for the general public.
No. 5 and 6 are Statutory purposes.
Mr. Pelstring informed the HRA that the first Internal Tax
Increment Financing Procedures draft was modeled after
the City of Woodbury who has no personnel with the knowledge of TIF.
The second draft presented includes more responsibility
by the Monticello city staff. Jeff O'Neill presented a written
outline of pros and cons from his and the City Administrator's
preception on why to contract withBDS for the internal procedures.
The outline was presented to the HRA and the HRA Director
at this late time. BUS has certified 15 TIF districts in
Vadinas Heights, is used as a support group for company
services and is a Small Business Development Grant writer.
Mr. Pelstring indicated the proposed fee schedule would
need to be revised, suggested a trial basis contract with a
30 day withdrawal notice. Everette Ellison made a motion
to contract with BUS, Inc. for a one year trial basis for
BUS to develop a strategy for finance plan development with
City Staff support to be determined by Mr. Pelstring and
City staff. :lotion was scccnded by Tom St. Hilaire and
passed unanimously. Koropchak expressed her disappointment
4. CONSIDERATION OF REVIEW TIF POLICIES AND PROCEDURES.
Corrections to the March 22, 1989 HRA minutes are to include the
HRH's rationale for the approval of the Economic Development Program
Contract between the HRA and Business Development Services, Inc.
1) Promote and enhance greater exposure of the City of Monticello,
2) enhance potential contacts or leads for the City of Monticello,
3) is financially economical if TIF plan not approved, no payment
to BDS. Inc. if TIF plan is approved cost is passsed on through,
4) a vin -win situation for all parties involved. A motion was
made by Lovell Schrupp and seconded by Everette Ellison, May 4, 1989,
to approve the March 22, 1989 HRA minutes with the addition of the
above named corrections, without further discussion the motion passed
4-0.
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HRA Minutes - 3/22/89
in theHRA members for the lack of consideration on her
position to contract with BUS. She expressed that BUS is a
fine company, however, felt the city was spending unnecessary
monies to duplicate functions that had been performed by
herself and to her knowledge without a complaint. She
continued to express that the Administration had not once
approached her to discuss this issue. Further, she had
been given the administrative role of the HRA by the
previous Administrator and has worked hard to learn the
role which is apparently changing.
5. CONSIDERATION OF AN UPDATE ON THE RELINOUISHING OF THE PLEDGE
AGREEMENT AND REFINANCING OF THE DISTRICT GENERAL OBLIGATION
BONDS.
Koropchak updated the HRA on the status of refinancing
the Tax Increment G.O. Bonds/loan funds as directed through
a motion by the HRA. Rick Wolfateller contacted Springsted,
Inc. for their opinion of the refinancing to advise the
City Council of Springsted's opinion as he assumed would be
their first question. A summary of Springsted's opinion
is "it does not appear the City's outstanding tax increment
debt can be advance refunded at this time and meet the
statutory requirements of realizing a 32 present value level
of savings. Since the individual districts have now been
(( L combined, there does not appear to be a need to consolidate debt into one issue as increment should now be able to be
shared. The City and HRA should review their pledge agreements
to ascertain the necessity of continuing the 150% level of
debt service coverage and/or reserves. Bond counsel should
review the consolidation process to insure all necessary
hearings and amendments have been met so that any new
debt will continue to meet statutory requirements."
6. OTHER BUSINESS.
Koropchak updated the HRA on the progress of the Modified
TIF District ®2 stating 1) the HRA hes purchased the Jones
building, 2) the party wall agreement between Steltons
and Topels has not been resolved, 3) Steltons are holding
off on relinquising the party wall agreement between
O'Connor and Steltons, 4) the HRA has not signed the
contract with Vaughn Veit for the demolition of the
Jones and Stelton properties, and 5) Broadway Square
Limited has not been notified of final approval for
FmHA funding. Topels are agreeable to relinquishing
the party wall agreement,- however, the cost to restore
the exterior wall after demolition has not been
determined nor to whom shall pay the restoration costs.
Broadway Square Limited will grant a five foot easement
to Topels for future wall repair.
7. ADJOURNMENT.
By consensus of the HRA, the meeting adjourned.
C7lz.\C61 o B t-�-1-0-1
011ie Koropchak, HRA Executive Secretary