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HRA Minutes 06-07-20060 CI MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, June 7, 2006 Commissioners Present: Commissioners Absent: Council Liaison Absent: Staff Present: 1. Call to Order. Chair Brad Barger, Bill Fair, Darrin Lahr, Dan Frie Steve Andrews Wayne Mayer Rick Wolfsteller, 011ie Koropchak, Angela Schumann Chairman Barger called the meeting to order at 6:00 PM, noting the absence of the Council Liaison and Commissioner Andrews. 2. Consideration to approve the May 3, 2006 HRA minutes MOTION BY COMMISSIONER FAIR TO APPROVE THE MINUTES OF MAY 3rd, 2006. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0. 3. Consideration of adding or removing items from the agenda. NONE. 4. Consent agenda. A. Consideration to approve amending the Contract for Private development between the HRA and Master's Fifth Avenue, Inc. Fluth provided an update regarding the project, indicating that he still intended to move forward with the project. However, at this time, potential tenants had backed out, which altered the timeline for starting the project. Koropchak reported that the HRA doesn't need to certify until July 1 St 2006. Koropchak pointed out that amending the contract doesn't affect the amount of years the HRA can collect increment. Koropchak noted that there had been a $7,500 deposit toward administration costs. The preliminary agreement was signed in 2004, with the private development contract signed this year. Koropchak asked if the HRA wanted her to check on the expenses to -date in comparison to the deposit. Administrative costs includes redevelopment inspection, Ehlers, and Kennedy & Graven expenses. Lahr and Barger stated that if contract says $7,500, and final expenses determined at the time of certificate of completion, it doesn't need to change as the developer will need to pay overages in any case. However, Barger inquired if Fluth is interested in knowing expenses to -date. Fluth stated that he is. Fluth asked about the sharing cost for the inspector, as he thought that had been the arrangement. Koropchak stated that she will check the minutes. Fair noted that the commencement date is the latest date that construction can start. MOTION BY COMMISSIONER LAHR TO APPROVE AMENDING THE CONTACT FOR PRIVATE REDEVELOPMENT AMONG MASTER' S FIFTH AVENUE, INC. AND THE HRA AS FOLLOWS: THE DEVELOPER SHALL COMMENCE CONSTRUCTION OF THE MINIMUM IMPROVEMENTS BY MAY 31 st, 2007. SUBJECT TO UNAVOIDABLE DELAYS, THE DEVELOPER SHALL COMPELTE THE CONSTRUCTION OF THE MINIMUM IMPROVEMENTS BY DECEMBER 31 st, 2009. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0. 5. Consideration to approve a resolution ado utina the modifications to the TIF Plans for TIF District Nos. 1-2 (redevelopment district) and 1-24 (qualified housing district). Koropchak stated that the modification has been recommended by Ehlers to maximize the HRA's ability to spend the tax increment revenues generated by the districts. Koropchak stated that District 1-2 originated for the Metcalf/Larson project. Based on Ehlers' projections of revenue and expenditures, with a district life to year 2010, there are projected revenues of $175,000. Koropchak reported that because it is pre-1990 redevelopment district, the tax increment is available budget expenditures in the district or project area. Koropchak indicated that District 1-24 was created for the St. Benedict's project. The HRA authorized the use of TIF to help St. Benedict's buy land and complete some improvements. Ehlers' projections show uncommitted revenues of $600,000, based on the district running through 2026. 2 Koropchak stated that the HRA has met all requirements in terms of the modification process. Fair asked how long the modifications are good for. Koropchak stated that the HRA only has to complete the modification process once. MOTION BY COMMISSIONER FAIR TO APPROVE A RESOLUTION. ADOPTING THE MODIFICATIONS TO THE TIF PLANS FOR TIF DISTRICT NOS. 1-2 (REDEVELOPMENT DISTRICT) AND 1-24 (QUALIFIED HOUSING DISTRICT). MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0. 6. Consideration to a-mrove entering into a Preliminary Development Agreement with Walker Instore, Inc. Koropchak reported that she had visited this company. They are currently leasing in Albertville. The company designs and assemble store displays. The company does qualify for the incentive rates because of the assembly and the floor space used for that purpose. It is a small project at 10,000 square feet, with 8 full-time employees. Koropchak stated that the proposal that was sent allows them to buy one acre at $1 per square foot plus V2 acre at market value plus trunk fees. Koropchak noted that the HRA had suggested a minimum 2 acre lot benchmark. Koropchak stated that the company hasn't committed to 1 V2 acres. The City Engineer and Koropchak will be meeting with the company on a site plan. Fair asked if the land is platted. Koropchak stated that the City plats as it sells land. Koropchak stated that they would like to start this year. Lahr asked if the business understands the requirements of the property. Koropchak stated that they had been given a copy of the covenants and criteria. Barger asked if the 2 acres is in the covenants. Koropchak responded that it is not required by covenants, but is listed as part of the criteria. Lahr inquired if the company couldn't attend the meeting this evening. Koropchak noted that they could not as the owner was scheduled to be out of town. As the HRA does not meet in July, it was her suggestion to place it on the June agenda. Barger asked if there is a good piece of land that could be used based on their requirement of only 1 acre. Korophak stated that it may depend on their site plan. • She noted they would be meeting on the 21St to work on a site plan and configuration. 3 Fair asked if we the HRA, should talk about a preliminary development agreement when the site plan is unresolved. Koropchak stated that we typically don't have a site plan at this point. Fair stated that as this buyer doesn't fit our criteria, he'd like to see the site. Lahr noted that there is an offer out there at 1 %2 acres. Barger clarified that the building would meet the criteria requirements. Koropchak stated that it fit what the HRA discussed last time. Lahr asked if the 2 acres is written somewhere. Koropchak stated that it is mentioned on the criteria sheet, but it is not included as part of the required formula. Barger suggested changing policy so that they match. Frie asked if there are smaller lots in other parks. Koropchak stated that she was unaware of any smaller lots. Lahr asked if they would have more definition on the site plan on the 2 1 " if the HRA decides not to do enter into the agreement. Koropchak clarified this is only a preliminary agreement. Barger and Frie indicated they don't have a problem with the company, but believed that the HRA should try to stay within the criteria. Lahr stated that he would rather wait until there is more information about the acreage. Fair asked if we can enter into the agreement with a contingency to negotiate after the site plan. Lahr noted that the original offer expired June 1. Barger recommended tabling the discussion until August. MOTION BY COMMISSIONER FAIR TO TABLE APPROVING ENTERING INTO A PRELIMINARY DEVELOPMENT AGREEMENT WITH WALKET INSTORE, INC. FOR MORE INPPUT AND CLARIFICATION. MOTION SECONDED BY COMMISSIONER LAHR. Lahr stated if there is a need to move forward, the HRA can possibly look at a meeting in July. MOTION CARRIED, 4-0. 7. Consideration to review the Transformation Home Loan Application Package for possible amending: Designation of a title company. Koropchak stated that given the experience at closings, designating a title company could smooth the process. She noted that the Peterson loan has not closed yet, as they are still working with the mortgage company. She also explained that with the Breiwick loan, the mortgage company did not want to close on the same day as the HRA loans, because if the loans close on same day, the applicant will have a higher interest rate. The delay at closing results I n the HRA's mortgage being recorded. Frie had suggested that the HRA put in the guidelines that the applicant has to close at a specified title company and that they all close simultaneously. Koropchak stated that the HRA could modify the application package to include a specific local company. Frie indicated that they would be experienced in this type of loan program and closing. MOTION BY COMMISSIONER FRIE TO AMEND THE TRANSFORMATION HOME LOAN PACAKGE TO DESIGNATE A LOCAL TITLE COMPANY. KOROPCHAK TO INTERIVEW AND SELECT THE APPROPRIATE REPRESENTATIVE. MOTION SECONDED BY COMMISSIONER LAHR. MOTION CARRIED, 4-0. Koropchak stated that the Peterson's new addition increased the property's taxable value by $67,000. 12 8. Consideration to define "qualified business" and "non-Quanned business" as it relates to marketinsz the Monticello Business Center., Based on last month's discussion, Koropchak stated that the City was only marketing to those who qualified for the $1 per square foot pricing. During the HRA's last meeting, accepting applicants at market rate was deemed acceptable. Koropchak inquired that for marketing, perhaps we want to change tactics to be consistent with that decision. Lahr stated that it might be best to just leave it and focus on marketing to qualified businesses. If non -qualified businesses do seek information, than we can provide them with what they need. Lahr recommended advertising to qualified businesses only, pointing out the difference between advertising and allowing. Barger stated that his point is to fill it up as soon as possible. The HRA Commissioners briefly discussed AVR and purchasing additional land for the business park. Lahr asked if Dahlheimers met the criteria. Koropchak stated that they are a little short on jobs. Koropchak stated that Karlsburger had been informed throughout the process that AVR may locate in the park. Lahr stated that until the cement plant comes, not in favor of changing the criteria. Barger asked if qualified business come in that don't meet the criteria, could they buy land. Lahr stated that the difference is between the criteria for preferred pricing and the covenants. All potential buyers have to meet the covenants. Only those seeking the $1 per square foot need to meet the criteria. 9. Consideration to authorize payment of HRA bills. Koropchak indicated that she had additional bills, totaling about $8000 and distributed copies. Fair asked if we could say no. MOTION BY COMMISSIONER LAHR TO AUTHORIZE PAYMENT OF BILLS. MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 4-0. 5 10. Consideration of Executive Director's Report I* - Koropchak reported that she had been working on preparations for the City's breakfast honoring Sunny Fresh Foods as the receipient of the 2005 Malcolm Baldridge Award. I* As noted previously, the HRA had closed on the Breiwick Transformation Home Loan, Koropchak briefly noted updates on the AVR site and purchase of additional Otter Creek property, as also discussed previously. Koropchak stated that she had included in the Commissioner's packets a response sent in a request for location on a 60,000 steel building. 11. Committee Reports Marketing Lahr reported that marketing was continuing for the business center through the website, brochure, and sign. The HRA will be entering into a contract for billboards. Fiber Optics Koropchak reported that the consultant was completing survey calls to businesses as part of their feasibility study, which will be completed in August. 12. ADJOURN MOTION BY COMMISSION LAHR TO ADJOURN. MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 4-0. on