HRA Minutes 01-07-2004MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, January 7th, 2003 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners: Chair Steve Andrews, Vice Chair Bill Fair, Brad Barger, Dan Frie, and
Council Liaison Roger Carlson
Absent: Darrin Lahr
Staff: Rick Wolfsteller, 011ie Koropchak, and Angela Schumann
1. Call to Order.
Chair Andrews called the meeting to order at 6:00 p.m. and declared a quorum.
2. Consideration to approve the December 3, 2003 HRA minutes,.
A MOTION WAS MADE BY DAN FRIE TO APPROVE THE MINUTES OF THE
DECEMBER 3RD1 2003 HRA MEETING. BILL FAIR SECONDED THE
MOTION. MOTION CARRIED UNANIMOUSLY.
3. Consideration of adding or removing items from the agenda.
None
4. Consent Agenda.
I* None
Consideration to approve and authorize execution of the Contract for Private
Redevelopment between Masters Fifth Avenue and the HRA for Landmark Square
Phase II.
011ie Koropchak, Executive Director indicated that Barry Fluth had additional
questions related to the contract. Brad Johnson expected to attend meeting.
Discussion tabled until Johnson arrived.
Upon arrival, Johnson related Fluth's questions on the Contract for Private
Redevelopment.
1. Cost problem: Fluth would like to decrease cost -of lots in order to meet target
gross profit, estimated at 4-5% for this project. This gross profit percentage is a
reduction from the average of 10%. Fluth would like costs of lot to be closer to
$30,000, currently at $36,000. Fluth will work on adjusting numbers to meet
target.
2. Deficiency clause: Fluth's concern is how and who should be held accountable
for tax deficiencies. Due to TIF regulations, the deficiency clause within the
contract indicates that the developer will pay difference. Koropchak had
00 discussed other options with the attorney. The three options are as follows:
HRA Minutes — 01 /07/04
10 Developer to provide a letter of credit, the developer to pay the deficiency, or the
HRA requires no security.
Fair inquired as to what the law specifies regarding using monies from other TIF
districts to balance out deficient payments in others. City Administrator Wolfsteller
indicated that allowing a shifting of funds would eliminate the need for an agreement.
Wolfsteller suggested the alternative of collecting on a cumulative basis with a final
settlement at the end of the specified increment. This method would catch
fluctuations within the time period.
Andrews stated that other developers may encounter the same question, so the
Authority will need to address the issue as a whole. The Authority and Johnson
suggested that further research be completed with the attorney on deficiency clause
options. Koropchak will provide new language to the developer before February
meeting, at which time the Authority will recommend action.
MOTION BY FRIE TO TABLE ANYACTION UNTIL FEBRUARY MEETING,
ANDREWS SECONDED THE MOTION. MOTION CARRIED UNINAMOUSLY.
6. Consideration to discuss Joint Meeting for Comp Plan Amendment for Block 52.
• 011ie Koropchak provided a written summary within the packet but opened the
discussion to the HRA for comments. Korochack indicated that the Council would
likely be taking action on this matter on Monday. Steve Johnson was to meet with
Jim McComb and Fred Katter last night. Koropchak had no new report from Mr.
Johnson.
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Johnson has inquired as to whether the HRA would sell property and be willing to
provide TIF assistance. Chairman Andrews indicated that lack of a plan makes
consideration of either question difficult. Koropchack has told Johnson that time
matters is a consideration, as eligible TIF expenditure deadline is June 3oth.
Discussion occurred relative to other possible projects on Block 52 and within the
downtown area. Koropchak noted that Cathy Froslie is considering platting condos
within her building. Koropchack and Jeff O'Neill have an appointment with Paul
Wurm to discuss possible redevelopment options.
Frie commented that he has not seen a project materialize without a letter of intent to
sell from property owners. As such, he is skeptical that any project can be successful
on Block 52 until the ownership situation changes. Barger asked about the block
across the street. Koropchack stated that the EDA is looking at a proposal the last
week in January. The property of Block 35 may be looking at what occurs with Block
52.
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HRA Minutes — 01 /07/04
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Andrews recommended providing more information to the community about what the
HRA is, and what resources are available through the HRA. Andrews felt this would
help bring about a better understanding of how to bring a project forward. Koropchak
indicated that there is a handout explaining the basics of the process.
Barger asked the audience if there is interest in new project in that area of the
downtown. Fire Chief Scott Douglas indicated that it depends on project. Keith
Kj ellberg indicated that whatever the project, it will need parking. He expressed
concern over removing the current parking lot, particularly as he has paid assessments
on it. Douglas said that a viable plan would go a long way. The market, population
and higher taxes are other concerns of businesses, added Douglas. Douglas and
KJellberg agreed that inexpensive commercial development space is needed.
Barger stated it is critical that in any proposal, the developer first control the property
then worry about rent and marketing. Redevelopment in the downtown is important
because it serves two purposes, increases tax base and controls sprawl. He also
indicated that a joint public/private project in the downtown would perhaps be the
most beneficial.
Fair and Andrews suggested that the HRA develop along -term plan in terms of
redevelopment options in the downtown area. Koropchak is to advise Paul Wurm
that funds are available for a redevelopment project through June.
Council will be considering the comprehensive plan amendment for setbacks relating
to the Block 52 on January 12.
No action required on the item as no formal project has been submitted.
7. Consideration to authorize second notice of administrative costs for non -certified TIF
District No. 1-32
Koropchak provided the staff report, indicating that Ehlers & Associates had prepared
District 1-321 which was not certified at County. Contract prepared by Kennedy and
Graven. Les Wurm provided a deposit, which was used against costs of preparing the
district. However, costs beyond the deposit still remain in the amount of $722.50. In
April, Koropchak sent an invoice for this amount and has received no response.
Recently, Koropchack also sent an invoice for a tax deficiency of $268.00 on District
1-23 .
A discussion regarding increasing deposit fees should be on the February agenda.
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HRA Minutes — O 1 /07/04
MOTION BY FRIE TO DENY AUTHORIZING SECOND NOTICE OF
ADMINISTRATIVE COST OVER -RUNS FOR NON -CERTIFIED TIF DITRICT
NO. 1-32 AND COVER COST BY TRANSFERING FUNDS FROM 1-23.
KOROPCHAK TO WRITE A LETTER OF EXPLANATION. SECONDED BY
FAIR. MOTION CARRIED 3-1, ANDREWS OPPOSED.
8. Consideration to authorize payment of HRA bills.
A MOTION WAS MADE BY FAIR TO AUTHORIZE PAYMENT OF THE HRA
BILLS. BARGER SECONDED THE MOTION.
MOTION CARRIED UNANIMOUSLY.
9. Consideration of Executive Director's Report.
Koropchak provided her report. She noted that some districts have been decertified.
Koroochak indicated that TJ Martin is delinquent on property taxes payable October
2003 and that JAC paid late with penalty.
Koropchak referred back to district 1-23, relating that she expects a constant
deficiency of $260. She said that the contract defines available tax increment as 80%
as compared to the normal 90%. This is a contributing factor to the deficiency in this
district.
Koropcak indicated that she will not be present at the March HRA meeting.
Koropchak distributed to the Authority the year-end report in housing permits and
valuations for their reference.
10. Committee Reports.
A. Small Industrial Group
Koropchak will be meeting with the Chadwick group on January Sty' at 4PM.
11. Other Business. None
12. Adiournment.
A MOTION WAS MADE BY ANDREWS TO ADJOURN THE MEETING AT
7:50 P.M. FRIE SECONDED THE MOTION. MOTION CARRIED
UNANIMOUSLY.
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