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
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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.
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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
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intended to start with 70,000 sq. ft. and expand several times
during the next 3-5 years.
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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.
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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
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