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HRA Minutes 04-04-1985( MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Thursday, April 4, 1985 - 7:00 P.M. Monticello City Hall Members Present: Chairman Gary Wieber, Bud Schrupp, and Ken Maus. Chairman Wieber opened the meeting asking for approval of the 3/11/85 minutes. Motion to approve said minutes was made by Bud Schrupp, seconded by Ken Maus, and passed 3-0. Allen briefly explained the latest events that have taken place with the STP Project. He reported on the meeting with Mark Dayton's office and the meeting with a Norwegian window manufacturer. When asked what location would be used and how much the land would cost, Allen stated that the 10 acres needed would depend somewhat on where the Beddor Project would be located. It is thought that the building should start on a corner and proceed inward, thus allowing for future expansion. The coat has been set at approximately 511,000-512,000/acre plus assessments. Chairman Wieber asked if Industrial Revenue Bonds (IRB's) would be requested and what position the City was in to receive IRB's. Allen stated that Dick Nadeau (MN Dept. Ec. Dev.) stated that if ell funds for non -entitlement cities were awarded, some projects would not happen and the funds would return to the competitive pool. Likewise, if entitlement cities have projects that fall through, their appropriations would be pooled for the competition in September. Overall, he feels confident of Monticello getting an IRB allocation. Allen explained the process of competing for IRB's and time frame. Chairman Wieber asked about getting IRB's from Becker. Allen stated that by entering a Joint Powers Agreement with the City of Becker, we could possibly get funds should the competitive pool dry up. Wieber asked what money, either in the form of low interest loans or grants, can Monticello expect to receive for this project. Allen stated that the State of Minnesota was very reluctant to commit itself. They did state that whatever monies Were available, troth Hastings and Monticello would get the same. How they package the money Is up to them. Dayton's office also stated that if legislation is passed regarding enterprise/opportunity zones, Monticello may utilize this type of incentive to perhaps abate corporate income, property, and sales taxes for a negotiable number of years. Allen stated that assuming all the givens were true, we could expect approximately $35,000-550,000 in tax increment that '3C C HRA Minutes - 4/6/85 would be used to retire the bonds. He further stated that although this would banofit a particular contractor and/or developer, it is needed to reduce the amount of lease payment per square foot. The project is risky, and thus some financial incentives are needed to make it attractive. The actual incentives would be given to the contractor/developer but would eventually be passed onto STP in the form of lower lease payments. Ken Maus inquired as to the commitment of the 5-6 tenants. Allen stated that he was waiting for more details on the types of firms, number of jobs and square footage needed. He added that although no guarantees have been suggested thus far, a representative from a Norwegian window company will be visiting Monticello and discussing the "Greenhouse" project. Bud Schrupp stated that contractors would want letters of intent, etc., to enter this kind of arrangement. Allen stated that when STP announces that Monticello is the site for this project, then the particular agreements and contracts would be drawn up. -2- Allen stated that he wanted the Authority to approve the concept and give staff authorization to proceed with the preparation of the TIF Plan if warranted. Gary asked if Construction 5's office/warehouse operation was being considered for this project. Allen stated that approximately five general contractors were asked for estimates of building coat and lease amounts. Approximately three area firms were asked if they wanted to participate in the concept. They were FSI, I%I, and Construction 5. Allen explained that the five contractors were willing to build, own, and lease back to the tenants 0 $2.65 to 53.00/sq. ft. for the printing project. Because the "Greenhouse" project was more risky, the lease payments rose to 54.50/sq. ft. He stated that the local firms' participation would probably be more favorable. Bud Schrupp moved to approve the proposed concept and authorize staff to prepare the TIP Plan if warranted. It was seconded by Ken Maus and passed 3-0. Ken Maus stated that the Authority should carefully consider who the TIF is granted to. He said he wasn't against the project, but suppose a local firm applies for TIF and is turned down because they are a little shaky financially. The local firm may come back and say that we are subsidizing foreigners but will not help local business. Allen stated that this was a difficult area, and each case should be judged on its merits. The next item on the agenda was the Beddor proposal. Gary explained the tour members of the Industrial Development Committee were given and the several buildings that ranged from 100,000 to 600,000 square feet. He then stated that this new project war C intended to start with 70,000 sq. ft. and expand several times during the next 3-5 years. -2- A HRA Minutes - 4/4/85 Gary explained that the buildings were very impressive and the employees to be young, well-trained individuals. Fitness plays an important part of their concept. Each building has their own saunas, weight/exerciso rooms, or handball courts for the employees' use. Allen explained that two or three locations in Oakwood Industrial Park were being considered. He stated that approximately 20 acres are needed for future expansion. The Beddors felt that Monticello was a good choice as far as they were concerned, but their clients have stated that it would be an inconvenience for them if they had to drive 20-30 more minutes from the airport to get to the plant. In this business, the client has to personally approve the color on site. Another potential problem would be getting the building completed by the 15th to the 30th of June for receiving the two new presses. Allen explained the TIF information and showed the authority a sample TIF Plan that he prepared. If during the next week or two the Beddors choose Monticello to construct the building, then we need approval of the concept and authorization to prepare the TIF Plan. Bud Schrupp moved to approve the proposal concept and authorize preparation of the TIF Plan if warranted. It was seconded by Ken Maus and passed 3-0. Allen stated that we would know Boddor's decision by the 15th of April. The third item on the agenda involved the proposal concept for Northern Insulation. Allen informed the Authority of Northern's background and that since their building was destroyed by fire in late 1984, they have been leasing space in Elk River. That space has become too small and expansion Is warranted. They do not like the idea of expanding in Elk River because of the high cost of electricity and the taxes. When they considered moving to other locations between Elk River and the Metro Area, the savings in electricity were negated by the increase in taxes. It wasn't until I contacted them about Monticello's low taxes, NSP's lower electrical rates, and excellent transportation system that they considered Monticello. Their present lease is due to expire in July, and something may happen in 1985. A railroad siding with capabilities to off-load is a must. Ten ton roads are a must for their incoming supplies. This has posed a problem in the past at the Elk River site. Pour to five acres of land are desired, and a 12,000-15,000 sq.ft. building is needed. Bud Schrupp moved to approve the proposal concept and authorized staff to prepare the TIF Plan if warranted. It was seconded and passed 3-0. -3- Ed HRA Minutes - 4/4/85 Ken Maus inquired about the Clow Stamping building or the Beet in Webb building. Allen stated that Clow's building would be too large, but perhaps the Beet in Webh building may work. He added that if it is the right size and meets Northern -s requirements, it will be suggested. In other business, Allen stated that the City Council authorized staff to complete a title search on the Hass property. If the title search is clean, the Council authorized staff to give $3,000.00 in earnest money for their property. They have made an offer on a house located in Balboul Estates. They have agreed on a total price for their property of $45,000.00. Allen stated that perhaps Ken Stolp of K & H Auto would sell and then the Post Office would expand their facility and construct a drive-thru mailbox area. We have provided the Post Office with demographic information, and they are checking into the feasibility of the expansion. A discussion was held as to the type of building and the possible building layout, etc. There was also some discussion of making the building larger than needed and perhaps leasing and/or selling space to various service firms. This building layout came about as a result of some negative discussion that took place between Metcalf & Larson. r Chairman Gary Wisbar asked if Allen still had the list he prepared for possible HRA members. Allen looked back in the agendas and found the list. Next the Authority suggested more names for possible BRA membership. Allen stated that HRA members needed to live within the corporate limits of Monticello. The following names were suggested in addition to the existing list: Jeff Erickson Paul Lutzke —y4L Leo Nelson Lloyd Lund -No Pete Becker Roger Hedke-149 Kermit Benaon There being no further business, the meeting was adjourned. Allen L. rPelvit Executive Secretary for HRA C. -4-