HRA Minutes 04-12-2006MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, April 12, 2006 - 6:00 p.m.
Mississippi Room - Community Center
Commissioners Present: Chair Brad Barger, Dan Frie, and Bill Fair.
Commissioners Absent: Vice Chair Steve Andrews and Darrin Lahr.
Council Liaison Absent: Wayne Mayer.
Staff Present: Rick Wolfsteller and 011ie Koropchak.
1. Call to Order.
Chair Barger called the special HRA meeting to order at 6:05 p.m. declaring a quorum.
2. Public Hearing on the Business Subsidv Agreement and Land Sale.
Chair Barger opened the public hearing on the business subsidy agreement. Koropchak noted
is the public hearing notice appeared in the local newspaper satisfying the legal requirements. The
Business Subsidy Agreement, a section within the Purchase and Redevelopment Contract,
outlines the general terms, job and wage -levels goals, remedies, and reports agreed upon by
the redeveloper.
With no public comments or questions, Chair Barger closed the public hearing on the Business
Subsidy Agreement.
Chair Barger then opened the public hearing on the land sale. Koropchak noted this public
hearing notice also appeared in the local newspaper satisfying the legal requirements. An HRA
has the power to acquire and sell land; however, unlike the City, the HRA must hold a public
hearing prior to the land sale according to Minnesota Statutes. On April 12, 2006, the City
Council by resolution conveyed 3.75 acres of Otter Creek Crossings to the HRA for the
anticipated land sale to SL Real Estate Holdings LLC.
With no public comments or questions, Chair Barger closed the public hearing on the sale of
land.
The commissioners noted they'd read the Purchase and Redevelopment Contract between the
HRA and SL Real Estate Holdings LLC which was attached to the agenda packet and had no
is questions. Koropchak outlined three questions raised by Mike Maher, SL Real Estate
Holdings LLC: First, requested changing the construction completion date from December 31,
2006 to March 1, 2007. Koropchak indicated she thought the HRA would be OK with this
change and informed him of the January 2, 2007, assessed market value date within the
• HRA Minutes - 04/12/06
Assessment Agreement and explained the January 2 date would remain as is. Secondly, Maher
thought the "wage -level goals" meant an "at least" per hour wage rather than as written
"average hourly wage of the 16 or 18 jobs, respectively". Third, he questioned if it was
reasonable for only 20 days for him to review and provide the HRA with a commitment of title
insurance policy. Koropchak explained it was 20 days from the date he received the
commitment and not 20 days from the execution date of this contract. Koropchak to clarify this
with Bubul.
COMMISSIONER BILL FAIR MADE A MOTION TO ADOPT A RESOLUTION
APPROVING THE PURCHASE AND REDEVELOPMENT CONTRACT BETWEEN
THE HRA IN AND FOR THE CITY OF MONTICELLO AND SL REAL ESTATE
HOLDINGS LLC AMENDING THE CONSTRUCTION COMPLETION DATE FROM
DECEMBER 31, 2006, TO MARCH 1, 2007; THE ASSESSED MARKET VALUE DATE
OF JANUARY 2, 2007, TO REMAIN AS WRITTEN; THE WAGE -LEVEL GOALS TO
REMAIN AS WRITTEN, AND TO CONSULT WITH THE HRA ATTORNEY
RELATIVE TO POSSIBLE AMENDING OF THE 20 DAY QUESTION. DAN FRIE
SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION
CARRIED.
3. Consideration to adopt a resolution authorizing Interfund Loan for advance of certain costs in
connection with TIF District No. 1-37.
The Interfund Loan is an Exhibit to the Purchase and Redevelopment Contract. The resolution
for adoption actually authorizes the advancement of funds for expenditures eligible to be paid by
tax increment. The amount of the loan (expenditure) is $142,113 at an interest rate of 6%.
Interest begins to accrue from the date of Closing.
BILL FAIR MADE A MOTION TO ADOPT A RESOLUTION AUTHORIZING
INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION
WITH TIF DISTRICT NO. 1-3 7. DAN FRIE SECONDED THE MOTION AND WITH
NO FURTHER DISCUSSION, THE MOTION CARRIED.
4. Consideration to review and accept the vear-end financial reports for the HRA General Fund
and TIF Fund as prepared by HRA Treasurer Wolfsteller.
Treasurer Wolfsteller distributed a copy of the preliminary summary of the HRA General Fund
and each TIF District Fund. He noted that an adjusted report would be forthcoming as this
afternoon the finance department, he, and Koropchak met with Ehlers to discuss a coding
system which satisfies the State Auditors and provides a consistency among the City's Audit
is Report and HRA's TIF Reports to the State Auditor. He gave an example of District No. 1-
3 6 (Dalhheimer's) where the cash received at closing for land sale no longer is deposited in the
district fund but is deposited in the General Fund. This also applies to the up -front deposit and
administrative cost shortfalls received. Koropchak noted the cash balances of District Nos 1-
2
HRA Minutes - 04/12/06
29 1-5, and 1-6 in which the HRA has or is taking steps to modify the budgets of districts 1-2,
1-6, and 1-24 in order to retain and maximize the use of tax increment. Shown on this
preliminary summary is a cash balance of $2,666,43 9. Koropchak noted the need to compare
these figures with the Ehler's Report recently prepared as a management tool for the HRA.
The Ehler's Report includes projected future obligations.
Given the fund balances, Fair initiated a discussion on the need for a workshop for the sole
purpose to discuss ideas and to target properties or areas for purchase as properties come on
the market. Members agreed and requested this be an agenda item on the May 3 agenda to
establish a workshop date.
NO ACTION WAS NECESSARY ON THE PRELIMINARY SUMMARY.
5. Other.
Koropchak requested clarification on the sale of land in Otter Creek Crossing. If a company
does not meet the criteria of job and wage goals or building value, is the HRA willing to sell
land at the market rate of $2.65 per square foot? The commissioners said yes. It was the
opinion of some of the commissioners, if the ready -mix plant locates in Otter Creek than
. perhaps the criteria will need to be relaxed. Lastly, Koropchak noted in her opinion- the land
prices need to be increase from $1.00 to $1.25 per sq. ft. and the market rate from $2.65 to
$3.00 per sq. ft. to keep up with inflation. Based on the meeting with Ehler's today,
Koropchak first needs to verify estimated infrastructure costs and number of developable acres
with WSB Engineering.
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6. Next HRA meetinia - Wednesdav, Mav 3, 2006. 6:00 p.m..
7. Adi ournment.
The HRA meeting adjourned at 7:00 p.m. by a consensus of its members present.
LA
Recorder HRA Chair
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