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HRA Agenda 12-04-1991AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, December d, 1991 - 7:00 PM City Hall MEMBERS: Chairperson Al Larson, Ben Smith, Lowell Schrupp, Everette Ellison, and Tom St. Hilaire. STAFF: Rick Woltateller, Jeff O'Neill, and 011ie Koropchak. GUEST: Mayor Ken Maus and Pat Pelstring, BDS, Inc. 1. CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE NOVEMBER 6, 1991 HRA MINUTES. 3. CONSIDERATION TO HEAR Of THE RESEARCHED INFORMATION ON THE GILLS PROPERTY TAR FORFEITURE. 6. CONSIDERATION TO REVIEW THE ANNUAL BILLINGS OF BDS, INC. S. CONSIDERATION TO DISCUSS FOR POSSIBLE AUTHORIZATION OF POLICY RECOMMENDATIONS MADE BY BDS, INC. BASED ON THE TIF FINANCIAL ANALYSIS. 6. CONSIDERATION OF AN AROPLAX UPDATE. 7. CONSIDERATION TO INVITE PRESTIGE BUILDERS TO AN HRA MEETING. S. OTHER BUSINESS. 9. ADJOURNMENT. MINUTES HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, November 6, 1991 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Al Larson, Ben Smith, Lowell Schrupp, Everette Ellison, and Tom St. Hilaire. STAFF PRSENT: Jeff O'Neill and 011ie Koropchak. CALL TO ORDER. Chairperson Al Larson called the ERA meeting to order at 7:00 PM. CONSIDERATION TO APPROVE THE AUGUST 21, 1991 HRA MINUTES. Ben Smith made a motion to approve the August 21, 1991 HRA minutes. Seconded by Everette Ellison and without any corrections or additions, the minutes were approved as written. 3. CONSIDERATION TO DISCUSS FOR POSSIBLE AUTHORIZATION OF THE RECOMMENDATIONS MADE BY BDS,INC. ON THE TIF FINANCIAL ANALYSIS. Koropchak informed the HRA that the re -ran TIF Analysis Summary, with the inclusion of the $260,000 bond issuance for TIF District 02; decertification of TIF District O1 in year 1991; and less the 10% administrative expenses and 5% bond reserve, projected an excess increment of a little over one million dollars over the life of the existing eleven districts. Based on this analysis which includes the assumptions (less administrative expense and bond reoerve), Mr. Peletring recommended the HRA to consider development and implementation of a policy to transfer 10% of the total TIF project increment into an HRA revenue fund (Admininstrative Account) for distribution of expenditures such as staff time and for additional marketing dollars. This 10% figure was originally Included within the city's bond issues but no policy exists to transfer tha funds from TIF to the HRA. If these funds are not expended by the HRA they would be available for debt service. Secondly, Mr. Peletring recommended the NRA consider development and implementation of a policy to establish e reserve level (6x) for future potential defaults and/or slow payments of taxes, thereafter, the remaining excess increment NRA MINUTES 11-6-91 would give the HRA some opportunity to fund additional public improvement projects. Thirdly, Mr. Pelstring recommended the HRA negotiate a loan payback with the City for Lots 5 and 6, Oakwood Industrial Park. Principal amount $136,000 over 10 years at 8% interest would be an annual debt service of approximately $20,268. Through the analysis and the implementation of these policies, the HRA would maintain an accountability of the TIF excess increments and it would assist the HRA in planning for future desired projects or goals. The HRA members felt the increase of 10% administrative revenue would only increase the administrative costs with no Increase in productivity. The administrative revenue would cover staff time and consultants time for marketing Monticello prior to a Monticello site location commitment. It was the understanding of the members that the HRA paid for BDS, Inc. expenses only upon the preparation of the TIF Plan/District or when staff determined a specific marketing necessity. The HRA is pleased with work by BDS, Inc., however, requested monthly billing statements rather than at random. Koropchak informed the HRA that the statements are itemized and she will provide a copy for NRA review. The HRA tabled any action on this agenda item and requested Mr. Pelstring be present to provide a clearer understanding of his recommendations. 6. CONSIDERATION TO DISCUSS FOR POSSIBLE kECO"EFDATION OF $HE CHELSEA LAND USE AND CIRCULATION STUDY/CONCEPTUAL AREA PLAN, Jeff O'Neill told the HRA that the land use study was the result of concerns raised by Remmele and Tapper's on the aesethetic value of the industrial park, the development of the school campus, the potential limited industrial apace, and talks with property owners and the Planning Commission. The Chelsea storm sewer system study resulted from city staff's recommendation for an overall plan prior to further development of the Farm Credit property. The professional planner's land use map proposed the Farm Credit Proporty zoned 82, B3, and I-1 to be Light Industrial/Business Campus and the northerly 60 acres of Kline Property to be Multi -Residential with the southerly 80 acres of the Kline property to be Single Residential. The HRA was shocked that the planner recommended the northerly 80 acres of the Kline property for multi -residential as they felt the school and industrial property were more compatible and they did not feel people would not want to live next to a school. Currently, the city has approximately 200 acres of available Industrial land and 400 residential lots for development. HRA MINUTES 11-6-91 Based on the current pace of residential development it will take an estimated 10 years before full development of the residential lots occur. Mr. O'Neill stated the Business Campus zone has the same uses as the I-1 zone. The ordinance does allow for metal buildings with one-half brick on all wall surfaces. Jeff further advised the members of the reduction in the original plan for a big commercial area in the area of Chelsea Road and County Road 118 which now is proposed as a smaller Neighborhood Commercial Center. Tom St. Hilaire made a motion strongly recommending the northerly 80 acres of the Kline Property be retained for industrial use. Seconded by Everette Ellison and without further discussion the motion passed unanimously. The recommendation was made to assure that the city maintains an adequate amount of acreage for future industrial development with the natural continuation to the south of the industrial park. 5. CONSIDERATION TO ESTABLISH 1992 HRA GOALS. Tom St. Hilaire agreed to serve on the HRA for the five year term, his name will be recommended to the City Council for appointment by the Mayor and Council in January. The following 1992 HRA Goals were established: 1. To research the need and feasibility for nenior quality townhome housing. (double garage, no stairs, 1,200 to 1,400 sq ft, 880,000 to 8100,000, within city limits preferably close to commercial). 2. To research and earmark property for future development of such housing. (Suggestions were old Dino property, existing Redevelopment District 02, area of Ivan Anderson's, or Broadway between Wright and Ramsey). To research the probability and to serve as a catalyst for the City Council to authorize forfeiture procedures against the Gille Property. (Invite Mayor Maus to the HRA meeting, research the City's access of Super Bund monies for soil testing and soil contamination cleanup, check on Gille property tax delinquency statue, invite City Attorney Paul Weingarden to the HRA meeting for Information on forfeiture procedures, and request the Mayor and City Council to proceed with forfeiture of Dille property). 4. To encourage and assist in the development of two Industrial projects of similiar quality to Remmele and Tapper. HRA MINUTES 11-6-91 CONSIDERATION OF AN UPDATE ON THE AROPLAR CORPORATION PROJECT. Koropchak advised the HRA that the City of Brooklyn Park has presented Mr. Jerry Schoen with a financial proposal. Although, the exact terms of the proposal are unknown, Mr. Schoen said the city can finance the project. The City of Monticello has certified the TIF District for assistance in the write down of land and approved a $30,000 OMEF loan at 6.5 percent interest over seven years for machinery and equipment. The financial package also included an SBA loan and bank financing. Koropchak reported she asked the EDA to respond to Mr. Peletring'9 suggestion to ask Aroplax, "What it would take for a Monticello site location commitment?" It was the feeling of the BDA that the Aroplax project was one which met the Industrial recruitment objectives of the IDC, the ARA, and the EDA. Therefore, it was suggested to ask, what it would take to get the company to Monticello. Koropchak did remind the EDA that the GMEF policy states the funds are for gap financing and are not intented as a substitute for commercial financing. Aroplax had the option of three bank commitments. Mr. Pelstring met with Mr. Schoen on Tuesday, November 8th and proposed a financial package with the insertion of the Minnesota Economic Recovery Grant therebye reducing the debt service by approximately $15,000. He seemed interested, however, believes the land values in Brooklyn Park will maintain or increase its value over a long time. Yet, he also see the benefits to a Monticello location. He feels he has made no site location commitment. The HRA questioned whether he was playing with the City for additional funds. 7. OTHER BUSINESS., Koropchak informed the HRA that she had requested Mr. John Dean of Holmes & Graven to prepare a preliminary agreement between the 11RA and a developer which basically ask the developer for upfront dollars to cover costs prior to the execution of a developeent contact therefore the HRA costs are covered if for some unknown► reason the proposed project did not develop. The HRA agreed with the concept of the document. ERA MINUTES 11-6-91 ADJOURNMENT. Al Larson made a motion to adjourn the HRA meeting, seconded by Tom St. Hilaire, the meeting adjourned at 9:00 PM. SLI 011ie Korogchak, HRA Executive Director HRA AGENDA 12-4-91 3. Consideration to Hear of the Researched Information on the Gille Property Tax Forfeiture. A. Reference and Backaround. At the November HRA meeting, one of the 1992 HRA Goals was to research the probability and to serve as a catalyst for the City Council to authorize forfeiture procedures against the Gille Property. More specifically, the NRA requested Mayor Maus attend an HRA meeting, research the current status of the Gille property tax delinquency, research the City's access to Super Fund monies for soil testing and soil contamination cleanup, invite City Attorney Paul Weingarden to the HRA meeting for information on forfeiture procedures, and request the Mayor and City Council to proceed with property tax forfeiture on the dills property. 1) Statue of Gille property tax delinquency - Status as of last vear: Gills 1.52 acres (previous gas station) $14,310.83 .25 acres (adjoining parcel) $ 1,244.59 Gille 1.03 acres (Carlson property) $ 897.65 Katzmarek 2.08 acres current Status as of todav: Gills 1.52 acres and .25 acres property tax delinquency has been forfeited to the State of Minnesota (recorded at the County). Dille 1.03 acres has reverted to Alice Carlson with all prcporty taxc3 currantly paid -in full. In my conversation with Darla Groehens, Wrigiat County Auditor /Treasurer. it is the County Auditor's office which starts forfeiture procedures. The county orders the sale and deed, and pays for the associated fees while the state issues the deed. Most property taxes must be delingent for five years and some commercial taxes for three years before forfeiture procedures can begin. In Wright County, Darla has started forfeiture procedures on eighty-three parcels delinquent from years 1977 through 1982. 1. A forfeiture notice was served on the Gills property by the Sheriff's Department on September 18, 1991. 2. The 30 to 60 day redemption period has passed. 3. The property was forfeited to the State of Minnesota (recorded at the County). HRA AGENDA 12-4-91 4. The State Department of Soil Conservation will walk the property for potential wells and wetlands. 5. Two County Commissioners, the Auditor, and the Assessor will determine the value of the property. 6. The City is notified of determined property value, asked to comment, have first right of purchase, and must decide whether to reinstate assessments, if appropriate. The procedure may take up to appropriately one year, Darla plans to call the State's Tax Forfeiture Attorney regarding the underground gasoline tanks on the Gills property to determine the state's role, if any, for tank removal, soil testing, or contaminations clean-up. Darla will inform me of her findings. 2) Underground Tanks - All Tank Owners Must: Report information to MPCA such as tank age, size and contents within 30 days after any changes in tank ownership, use or contents, or any tanks not vet been reported. (This regulation has been in place for underground storage tanks since 1995). Septic tanks, most underground petroleum storage tanks smaller than 1,100 gallons are not covered by this requirement. One certified underground storage tank contractor estimated the Gille tanks to be between 2,000 to 6,000 gallons. Any underground flammable liquid tank that has been out of service for one year must be removed from the ground to comply with Article 79 of the Minnesota Uniform Fire Code. Notify MPCA of any tank removal 30 days in advance. For any underground tanks taken out of service after 1973, report to the the MPCA the date the tanks were taken out of service and the type and quantity of substances remaining in the tank, if any. New federal regulations also require tank owners to evaluate the excavation oite to determine If there has been any leakage from the tank. 4. Minnesota has two cleanup programs for leaking tanks: state's Petrofund and national's Luot Trust. The two programs provide funds to the MPCA to clean up sites where the owner or operator cannot or will not perform the needed work. The state's HRA AGENDA 12-4-91 Petrofund, administered by the Petrofund Board, can also provide partial reimbursement to leaking underground tank owners/operators who have spent money cleaning up a release if the MPCA determines that the cleanup was or will be adequate. Under the Petrofund's reimbursement provision, the board shall reimburse a responsible person who is eligible under subdivision 2 from the fund for 90% of the portion of the total reimbursable costs or $1,000,000, whichever is less. Does not cover costs related to the physical removal of a tank or samplings. The MPCA will also use the federal LUST Trust to clean up underground tank sites where owners and operators are unknown or uncooperative, and to respond to leaking tank emergencies. S. Landowners who purchased property without knowing or having reason to know that buried storage tanks existed on the site are not responsible for cleaning up leaks from such tanks if the property owners can show they did not significantly contribute to the leak after they learned or should have learned that the tank was on the property. State law also requires anyone selling land to file an affidavit with the county recorder that identifies any underground tanks or leaks on the property that have not been cleaned up, 6. Superfund Is controlled by the Attorney General's Office. Chapter 223 clarifies that the state, an agency of the state, or a political subdivision that acquires property through eminent domain, through negotiated purchase after filing an eminent domain petition, or by adopting a redevelopment or development plan, to not a respond ible person under the state's superfund law. The law also protects subsequent purchasero and mortgage holders. Finally, it provided protection to contract for deed vendors, who reacquire property polluted after the contract was executed. Effective Auguot 1, 1991. Mr. O'Neill will report on Superfund availability to cities. Hiotory of the oille property, without an official on -cite Inspection, is the property was used as a cut rate gasoline HRA AGENDA 12-4-91 station along Highway 152 with the potential of three islands for diesel, regular and supreme on site. Supposedly, the tanks were pumped dry and filled with sand some twenty years ago. B. Recommendation. As the HRA's goal was to research the probability and to serve as a catalyst for the City Council to authorize forfeiture procedures against the Gille property, no action ie necessary as the County Auditor has executed those procedures. C. Supoortina Data. Copy of common questions and map. a: Are tank installers certified by the MPCA? • the MPCA Is not properly notified of a'tank leak A: reimbursement from the Pelrofund may be reduced, Not at this time. The MICA expects to begin a and if the cleanup plan is not approved by the MPGA, certification program for tank installers in late 1989. • no reimbursement from the Petrofund is possible. After rules for the certification program are adopted, only certified installers will be able to Install, repair or 0: Where can I dispose of soil contaminated by ' permanently remove a tank from servicein Minnesota. petroleum_psoducts? Q: Will the MPCA inspect tank removals and issue A: Although most petroleum-contaminated soil `dean bill of health' to the site? does not qualify as a hazardous waste, disposal of A: petroleumcontaminawd sail In landfills„ soil at Apiles Unfortunately, there is no such thing as a 'clean or uncontrolled fill is not an aoceptable.disposal bill of health' for most storage tank sites. Sometimes method. Currently, tine moat common treatment MPGA staff will be able to arrange to observe a tank options are- removal, but tank owners and operators themselves should always examine removed tanks and ■ land spreading or land treatment — this option surrounding soils for alga of leaks or overfills,,— required prior approval from both the MPCA'and federal law requires owners and operators of most [=I officials, and underground tanks to take samDlesiround the tank areas to check for leaks when tanks am removed. Itis ' ■ incorporation Into asphalt, or "burning" soil in an always a go6diaa—w arrange foq an Independent , 'asphalt hot-mix plant. This also requires MPGA observer (flre+rarshal, buildinglnspector, consultant, approval• etc.) to observe and take notes at a tank removal. An observer will not always be able to spot subtle signs of The MPGA continues to study these and other options, leakage, but a trained observer can verify the cleanup and don help tank owners and operators choose a safe actions that were taken. If any signs of leakage are treatment method for their soil wastes. fourid, the tank owner or operator must notify the MPCA. And remember— If you are planning to dose Q: Can I have an unused underground tank In the or remove a tank, you must notify the MPCA 30 days in ground?., advance In order to meet federal rquirenxnts. -A: For many years, the National and Minrusuld Q, • Does a'tank test' prove that I don't have a Uniform Fire Codes have required proper handling of problem? unused tanks. These requirements arc now part of the A, MPCA believe by new fodcml'urdergmund tank regulations. If an • staff that a tank teal pedomxd underground tank has been out of service for 90 days, it a qualified company can often detect a leak. However, must be properly safeguarded of rived in o manner even if a tank 'passes' the test, tanks or li nes may hAve approved by local fire chic) or stain i re mar". having leaked, may be leaking slowly, or the test method may laa(�ing imiudci the fill line, gauge have been flawed. The MPCA staff typically will be convinced of nonleakage only by Boll boring results and opening and pump connection secured against tampering. A tank which has been out of use for one a test of ground water around the lanky ysarjnd which hasn't been upgraded to meet new Q: federal standards mut generallyc�removed from the Why should I notify the MPGA before dohs s ground and the halBproperly filled. In certain cleanup? circumstances (such as tanks under roads), it may be A: abandoned In placeand safeguarded attending to , Failure to reporta leak or a spm of a subamnce Instructions from the local firs chief or state fire under your control is a violation of the law: Furthn, If marshal. , HILLTOP RIVE r rj °®el`Zp•� f � _ � lC a rt n rr, r, DR. 0 THE SECUADNO AD': ). KATZKAREX PROPERTY GILLS PROPERTY CARLSON TROPERTY MONTICELLO KIDS ARE PEOPLE. TOO. INC. WEST PRAIRIE PARTNERSHIP tp w e T \ A \\ a•�• c .lam \ .SANDY 1 i•e... • R / a?� \\� • • u y S ' q cr ; r• R L9 _C32 ? ... O .. NRA AGENDA 12-4-91 4. Consideration to Review the Annual Billings from BDS. Inc. Reference and Backaround. Enclosed you will find a summarized copy of BDS, Inc. annual billings. BSD, Inc. has been requested to submit the HRA with monthly billing statements and have acknowledged the $450 credit due for duplicate and marketing charges. Previously, it was agreed upon by both parties that the HRA would not be billed for marketing fees. However, is the HRA aware of the packaging fees which do not include TIF preparation fees but are fees associated with preparation of other financial funds such as the SBA loans, the Minnesota Economic Recovery Grant, and the Central Minnesota Initative Hund are charged to the HRA as the HRA has the contract with BDS, Inc. BUSINESS DEVELOPMENT SERVICES BILLINGS AROPLAX PROJECT TIF DISTRICT NO #12 $1,925.00 ESTABLISHMENT/PWP 6-14-91 $3,850.00 PACKAGING/DL.G 3-12-91/4-25-91 3.50 HRS $ 262.50 PACKAGING/DLG 4-2-91/6-28-91 21.50 HRS $1,612.50 PACKAGING/DLG 7-1-91/7-22-91 11.00 HRS $ 825.00 MILEAGE/PWP 7.00 HRS 83 MILES $ 19.92 MILEAGE/DL(; .50 HRS 42 MILES $ 10.08 MILEAGE/PWP .10 HRS 42 MILES $ 10.08 MILEAGE/DLG 79 MILES } 18.96 TOTAL $6,609.04 LESS PACKAGING 4-2-91/4-25-91 2.00 HRS ! 150.00 TOTAL TIF ANALYSIS/PWP 5-13-91/6-26-91 $6,459.04 (HOLMES 6 GRAVEN) TIF ANALYSIS/PWP 7-12-91/8-21-91 21.00 HRS DEVELOPMENT AGREEMENT 9-6-91 $ 81.25 ..•f••fffffff•ifffff♦fff ck. z'b-a. lffffflfffffffffff►f fffffffflff/fflfffff 9HIHGOBEE, INC. TIF DISTRICT NO A13 PREPARATION/PWP(HOLDBACK)7-29-91 $1,925.00 DEVELOP AGMT(HOLDBACK) 7-29-91 ! 425.00 TOTAL $2,350.00 (BRADLEY 6 DEIKE, DEVELOPMENT AGREEMENT) PHONE, PWP 6-27-91/6-29-91 1.10 HRS $ 132.00 DRAFT CONTRACT, PHONE 7-3-91/7-31-91 7.00 HRS $ 840.00 REVIEW AGMT, OLLIE 8-7-91/8-26-91 .50 HRS $ 60.00 PHONE, OLLIE 9-10-91 .10 HRS 6 12.00 TOTAL $1,044.00 (PAUL WEINGARDEN, CITY ATTORNEY) SHINGOBEE, INC. 3-13-91/9-91 14.00 HRS $1,050.00 •fffffffffflf•fffffffflfffffffff••fffffffffffffflfffffffffffffff• TIF ANALYSIS/PWP 5-13-91/6-26-91 8.50 HRS $ 637.50 TIF ANALYSIS/PWP 7-12-91/8-21-91 21.00 HRS 11.575.00 TOTAL $2,212.50 MARKETING 4-16-91/4-19-91 4.00 HRS $ 300.00 4-12-91/6-28-91 15.25 HRS $ 0 7-2-91 .25 HRS 0 TOTAL $ 300.00 LESS MARKETING BUSINESS DEVELOPMENT SERVICE, INC. TOTAL TIP DISTRICT NO 0 14, AROPLAK $6,459.04 TIP DISTRICT NO i 13, SHINGOBEE, INC. =4,350.00 TIP ANALYSIS 14,415.00 TOTAL $11,044.04 HOLMES 6 GRAVEN $ 81.45 BRADLEY 6 DIEKE $1,044.00 PAUL WEINGARDEN $1,050.00 BDS, INC. (CREDIT OWNED) $ 450.00 $ 300.00 HRA AGENDA 12-6-91 Consideration to Discuss for Possible Authorization of Policy Recommendations made by BSD. INC. based on the TIP Financial Analvsis. Reference and Background. At the November HRA meeting, the members were requested to consider the authorization to develop certain policies as recommended by Mr. Pelstring of BDS. Koropchak unable to makte clear the logic and in fairness to all, both Mr. Pelstring and the HRA members, Koropchak suggested Mr. Pelstring be present to explain the recommendations more clearly. The three recommendations were: To consider development and implementation of a policy to transfer 101 of the total TIF project Increment into an NRA revenue fund (Admininstration Account) for distribution of expenditures such as staff time and for additional marketing dollars. 2. To consider development and implementation of a policy to establish a reserve level (5%) for future potential defaults and/or slow payments of taxes, thereafter, the remaining excess increment would give the HRA some opportunity to fund additional public Improvement projects. To consider the negotiation of a loan payback with the City for Lots 5 and 6, Oakwood Industrial Park. Principal amount $136,000 over 10 years at 8% interest would be an annual debt service of approximately $20,268. HRA AGENDA 12-6-91 Consideration to Discuss for Possible Authorization of Policy Recommendations made by BSD. INC. based on the TIP Financial Analvsis. Reference and Background. At the November HRA meeting, the members were requested to consider the authorization to develop certain policies as recommended by Mr. Pelstring of BDS. Koropchak unable to makte clear the logic and in fairness to all, both Mr. Pelstring and the HRA members, Koropchak suggested Mr. Pelstring be present to explain the recommendations more clearly. The three recommendations were: To consider development and implementation of a policy to transfer 101 of the total TIF project Increment into an NRA revenue fund (Admininstration Account) for distribution of expenditures such as staff time and for additional marketing dollars. 2. To consider development and implementation of a policy to establish a reserve level (5%) for future potential defaults and/or slow payments of taxes, thereafter, the remaining excess increment would give the HRA some opportunity to fund additional public Improvement projects. To consider the negotiation of a loan payback with the City for Lots 5 and 6, Oakwood Industrial Park. Principal amount $136,000 over 10 years at 8% interest would be an annual debt service of approximately $20,268. I10V-05-'00 TUE 10:58, ID:1-11W 4-00 TEL N0:612 258-4648 4412 P02 - Busin a mwdopnretrt tBarvW% Int:. MEMORANDUM TO: .OI1M Kbropabet, City of Maoticeilo . •:.'Hot}eigg esti Redevelopment Authority FROM: `Petrick Polstrin, President DATB: N&Omber 3, 1991 �tB;• ; ;TIF, ANALYSIS I ;warmed to provide a further update after our recant discussion on the Monticello Hcoift acid Redevelopment Authority Tax Increment Ffnanoiag analysis. I pave prepared a revised mammary report for the HRA'a TIF program with the fob. 1) Addition of bond issue tied to TIF District No. 2, bands issued m August, 1989. I appreclate you bringing this bond ism to our attention. This bead issue was aonminated after our original analysis report in the sp * of 1989, and, as such, we did rmt have a record of this debt obligation for this district. 2) We aq)usted the expected Increment from TIF Distriot No. 1, es the project will be decertified at the end of payable 1991 tax Increments. These changes. -mom notably the addition of the bond Issue, Lmpaetm the avaiWe exam increment for the HRA/City of Monticello. You will note that the excess incregneat heti been algnificandy reduced, beginning in 1993 by an estimated $30,0000 • $33,000 of that bond Issue. Please ooze that this excess increment also adjusts for dedueft allocated adn9alMtive expenses (column 7) and a s percent excess asmolated'vrM each of the bond Issues (column 17). Also, 6t the• HRA's review,'! have Included a secoodary summary report which assumes a very minimal laud of inflationary value. 1 have applied a 2 percent annual Inflationery value to the anticipated met ice; and, you oma we that the annual excess Intxemen; Is sledtlooatly higher. A 2 percent infladaury value Is still relatively eoaeetvative and this tan provides an indication of available excess Incrom m fpr the HRA in limos years. PION -05-' 00 TLE 10: 58 I D: 11112 1 200 TEL 110: 612 258-4618 13412 P03 TPP ANALYSIS Page 2 Also, it should be noted that this analysis assumes that time will be no additional development in any of the existing TIF districts. Addidonal development in several of the districts does appear likely. I also wanted to follow up on our discussion relative to administrative issues for review by the HRA. In terns of debt service reserve, my original relation suggeate that an additional S - 10 percent of atmual debt service be set adde each year. Thia figure should be weighted against existing reserves and/or debt service accounts which are currently in place. Another good measure to establish the appropriate reserves would be to maintain an amount equal to the next year's amlual debt service in your reserve amaatare. For Instance, in 1992, the MRA's total debt service requirements are approximately $194,000. I would recommend that you analyze existing debt service reserves and, If they do not total $194,000, that the 'excess increment" be dedicated into your debt service aow= until you reach this amount. In the HRA's case, the annual debt service will remain relatively c onstatn until 1995 when two of the bond lam MF bonds number 3 and 4) payoff. At that time. the debt service reserve could be reduced, subject to the issume of additional bonds over the next three years. I also wanted to clarify recommendations reprdlag administrative expenses. The TIF summary automatically dedicates 10 percent of your projected increment for City/HRA administrative expenses. In 1991, this amounts to approximately $26,900. In 1992. this figures Increases approximately 332,600. [7bese amounts are deducted from your 'excess increment" and would be available for debt service If they are not expended by the 104) A better approach, and a method to guarantee that the TIF program pays for Itself. would be to budget this item as an annual revenue figure and annually matte a transfer to the administrative account for the HRA. Plum review this information and contact me if you have any questions. Unfbrdrately, I have a previous commitment on Wednesday, November 7th. However, I would be - � P than happy to thea with the HRA to discuss these items in greater detail, should you feel that it le necessary. PWPAd Apache 10 #Try .161 IlCtININT ASWSIS Ll Im an 141 Its Chrm 0 pm acil CrIT rm Cn? 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THIS AQREMCM, dated this day of , 19_, ! by and between the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota ("HRA"), a Minnesota public body corporate and politic and a Minnesota ("Developer")i WITNESSETH: WHEREAS, the HRA desires to promote development of an area in .the City (legally described in Exhibit A attached hereto) located at ("Property"); and WHEREAS, the Developer has submitted a preliminary proposal for development of the Property ("Development"), a copy of which proposal is attached hereto as Exhibit B; and WHEREAS, the Developer has requested the HRA to explore the use Of tax increment financing (TIP) to offset a portion of the Development costs; and WHEREAS, the HRA and Developer are willing and desirous to undertake the Development if (i) a satisfactory agreement can be reached regarding the HRA's commitment for public costs necessary for the Development; (ii) satisfactory mortgage and equity financing for the Development can be secured by Developer; and (iii) the economic feasibility and soundness of the Development and other necessary preconditions have been determined to the satisfaction of the parties; and WHEREAS, the HRA is willing to evaluate the Development and work toward all socesaary agreements with Developer if Developer agrees to reimburse the HRA for its costs if the Development is 1023M .-3 1 :qV Ob '91 LO:--,? RAJ ES '� GPA,EI I F. J y abandoned or necessary agreements are not reached under the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations set forth herein, the parties agree as follows: I. Negotiations between the parties shall proceed in an attempt to formulate a definitive development contract ("Contract") based on the following: ' (a) Developer's current proposal which show the scope of the proposed Development in its latest fora as of the date of this Agreement, together with any changes or modifications required by the NRA; (b) a mutually satisfactory Contract to be negotiated and agreed upon in accordance with negotiations contemplated by this Agreement; (c) such documentation regarding economic feasibility of the Project as the RRA may wish to undertake during the term of this Agreement; and (d) other terms and conditions of this Agreement. Z. It is the intention of the parties that this Agreement (a) documents the present understanding and commitments of the parties and (b) will lead to negotiation and execution of a mutually satisfactory Contract for the Development prior to the termination date of this Agreement. The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed, will supersede all obligations of the parties hereunder. 3. During the term of this Agreement, Developer agrees to: (a) Submit to tho NRA a dealgn proposal to be approved by the HRA showing the location, size, and nature of the proposed Development, including floor layouts, renderings, elevations, and other graphic or written explanations of the Development. The design proposal shall be accompanied by a proposed schedule for the starting and completion of all phases of Development. The Developmont shall be dosigned to accommodate public facilities to be constructed adjacent to, or as part, of the Dovolopment. (b) Submit an over-all cost estimate for the design and construction of the Development. asmw 0111191.2 2 r1ov Oe '91 10: c? W -4J ES w GF);�V l P.5 (c) Submit a time schedule for all phases of the Development. (d) Undertake and obtain such other preliminary economic feasibility studies, income and axpenae projections and such other economic information as the Developer may desire to further confirm the economic feasibility and soundness of the Development. (e) Submit to the HRA the Developer's financing plan showing that the proposed Development is financially feasible. (f) Furnish satisfactory financial data to the HRA evidencing Developer's ability to undertake the Development. 4. During the term of this Agreement, the BRA agrees tot (a) Take all actions necessary to create a Project Area (if necessary) and Plan therefor, and a Tax Increment Financing District ("TIF District") and Tax Increment Financing Plan ("TIP Plan") therefor, in accordance with Kinn. Stat. Sections 469.174 through 469.179. (b) Proceed to seek all necessary information with regard to the anticipated public costs associated with the Development. (c) Bstimate the HRA's level and method of financial participation in the Development and develop a financial plan for the HRA's participation. S. It is expressly understood that execution and Implementation of a Contract shall be subject tot (a) A determination by the HRA that its undertakings are feasible based on (i) the projected tax increment revenues and any other revenues designated by the HRA; (ii) the purposes and objectives of the Plan and TIP Plan; and (iii) the best interest of the BRA. (b) A determination by Developer that the Development is feasible and in the best interests of Developer. (c) Bzecution of the Contract by the parties. 6. Tho Doveloper hereby grants and conveys to the HRA and Its agents, its and their successors and assigms, an easement over and upon the Property for the purpose of ingress and ogress and for conducting such tests or collecting such data as may be reasonably necessary to determine the feasibility of the Development. The easement shall terminate upon execution of a Contract or termination of this Agreement in accordance with the torms of this Agreement, whichovor occurs first. m, M M104 3 MV 06 '91 10 K tk�FEB 2 GRW+VI F.7 7. This Agreement is effective for a teras ending days from its date, unless extended by mutual agreement of the parties. If for any reason a Contract is not negotiated and executed within the term of this Agreement or any mutually approved extension thereof, the Developer shall reimburse the HRA for all costs reasonably expended by the HRA in regard to the Development. 8. In order to secure payment of the costs incurred by the HRA in regard to the Development, the Developer shall deliver to the HRA cash or a letter of credit in the amount of i The letter of credit shall be in form satisfactory to the HRA. The cash or letter of credit shall be delivered by the Developer to the NRA within days of the date of this Agreement. The letter of credit shall be valid for a miniaom of months from the date of this Agreement. If while determining tFe feasibility of the Project the HRA determines that its expenses will exceed the amount of the deposit and that additional security is required, the HRA shall notify the Developer of the aaount of such additional security. The HRA may terminate this Agzmement in the event that such additional security is not delivered with such period. Within ton calendar days of receipt of said notice, the Developer shall deliver to the HRA the required additional security. If necessary In order to ensure that the HRA possesses sufficient financial security at all times prior to completion of the project, the Developer shall renew or extend the letter of credit. Upon receipt of written demand from the HRA for reimbursement of its costs, the Developer shall remit payment to the HRA within ton days. If the Developer fails to make the payment within the specified period of time, the HRA shall utilize the cash or latter of credit to reimburse itself. 9. This Agreement may be terminated upon 30 days' written notice by the HRA to Developer If: (a) an essential precondition to the execution of a contract cannot be met; or (b) an impasse has been reached in the negotiation of any material term or condition of this Agreement. If the HRA toraintos the Agreement under this Section 9, Developer shall remain liable to the HRA under Sections 7 and 8 herein for costs reasonably incurred by the HRA through the date of termination. 10. The HRA agrees that it will not solicit proposals for development of the property from others daring the time that this Agreement is in effect. 11. In the event that the Devolopor, its heirs, Successors or assigns, fail to comply with any of the provisions of this Agreement, the HRA may proceed to enforce this Agreement by appropriate legal or equitable proceedings, or other similar proceedings, and the Developer, its heLrs, successors or assigns, a�uuo atn•� NOV 06 '91 14:18 HXMS & GRAVEN P.2 agree to pay all costs of such enforcement, ineluding reasonable attorneys fees. 11. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the ' validity of any remaining portion of the Agreement. 13. In the event any covenant contained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach. 14. Notice or demand or other communication between or among the parties shall be sufficiently given if sent by taail, postage prepaid, return receipt requested or delivered personallys (a) As to the HRA: (b) -As to the Developer: R( 15. This Agreement may be executed simultaneously in any i number counterparts, all of which shall constitute one and the same instrument. IN WITNESS IMMEDY, THE HRA has caused this Agreement to be duly executed in its name and behalf and its seal to be duly affixed hereto and the Developer has caused this Agreement to be duly executed as of the day and year first above written. DEVELOPER: NRAt i Its Its Its Its aie 5 NOV 06 •91 14:19 HXPE5 8 GRAVEN STATE OF MIr MSOU ) �. ) as COUNTY Or ) P.3 The foregoing instrument was acknowledged before me this day of , 19910 by and , the Chairperson and B:ecutive Dsrector or the Wmaing and Redevelopment Authority in and for the City of Monticello. Notary Public STATE OF MIMMMMA ) - ;ae COUNTY Or The foregoing instrument was acknowledged before me this day of , 1991, by and , the and of , a Corporation, on Denalf of the corporation. Q votary Public ! THIS IHSTRlXZW VAS DRAFTED SYi RM S i CRAVEN, CRARTBRED 470 Pillsbury Center Minneapolis, !as 55402 (612) 337-9300 main ana•$ 6 MICROFILM TITLE PAGE CITY OF MONTICELLO Housing & Redevelopment Authority (HRA) Agenda Books 1992 l:ll�wflV1�' N'�fMKnfJ�y�rIMR YY A