HRA Agenda 02-01-1989AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, February 1, 1989 - 7:00 PM
City Hall
MEMBERS: Acting Chairperson Al Larson, Lovell Schrupp, Ben Smith,
Everette Ellison, and Tom St. Hilaire.
CITY STAFF: Administrator Rick Wolfsteller, Assistant Administrator
Jeff O'Neill, and HRA Director 011ie Koropchak.
1. CALL TO ORDER.
2. APPROVAL OF THE JANUARY 3, 1989 AND JANUARY 17, 1989 HRA MINUTES.
3. PUBLIC HEARING FOR THE DISPOSITION OF LANDS TO BROADWAY SQUARE
LIMITED PARTNERS.
4. PUBLIC HEARING FOR THE ACQUISITION AND DISPOSITION OF LAND
FOR TAX INCREMENT DISTRICT NO. 1-8.
5. CONSIDERATION TO REVIEW THE RESERVE FUND CREATED BY COMBINATION
OF THE DISTRICT TIF PLANS AND/OR BY RELINQUISHING THE PLEDGE
AGREEMENTS, AND TO REVIEW THE POTENTIAL REFINANCING OF THE
DISTRICT GENERAL OBLIGATION BONDS.
6. CONSIDERATION TO REVIEW POLICIES/GUIDELINES FOR THE USE OF TIP.
7. CONSIDERATION TO DISCUSS POTENTIAL DEVELOPERS FOR QUALITY
ELDERLY HOUSING.
B. CONSIDERATION TO ELECT THE HRA CHAIRPERSON AND VICE CHAIRPERSON.
9. CONSIDERATION TO APPROVE RECOMMENDED 1989 HRA GOALS.
10. CONSIDERATION OF AN UPDATE TO TIF DISTRICT /5, CONSTRUCTION FIVE.
11. OTHER BUSINESS.
12. ADJOURNMENT.
I
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING
Tuesday, January 17, 1989 - 1:00 PM
City Hall
MEMBERS PRESENT: ACTING CHAIRPERSON AL LARSON, BEN SMITH, AND
EVERETTE ELLISON.
MEMBERS ABSENT: LOWELL SCHRUPP AND TOM ST. HILAIRE
CITY STAFF PRESENT: RICK WOLFSTELLER, JEFF O'NEILL, AND HRA
DIRECTOR OLLIE KOROPCHAK.
1. CALL TO ORDER.
Acting Chairperson Al Larson called the HRA Special meeting to
order at 1:15PM.
2. CONSIDERATION TO REVIEW BUILDING AND SITE PLANS FOR DEVELOPER,
NORTHERN STATES POWER COMPANY.
Gary Anderson, Building Inspector, informed and reviewed the
proposed NSP site and floor plans with the HRA stating the plans
need for additional landscaping (only in the front), the plans
show no parking layout or number of parking spaces, the plane
show no concrete curbing around the parking lot or driving area
perimeters, and shows no separation between side lot lines and
front lot lines from the blacktop. The building and mechanical
plans havn't been reviewed by staff and staff has received
no grading or drainage plans. Gary Anderson informed the HRA
he would be contacting NSP about the needed requirements.
The preliminary site and floor plans were accepted by the
HRA based bn the fact the uncompleted ordinance requirements
are completed by the developer.
3. CONSIDERATION TO AUTHORIZE THE ESTABLISHMENT OF A PUBLIC HEARING
DATE FOR THE DISPOSITION OF LANDS TO BROADWAY SOUARE LIMITED
PARTNERS.
Koropchak informed the HRA that a public hearing was previously
held for the acquisition of the Ford, O'Connor, Stelton, and
Jones' properties, however, was exclusive of the solo of
said lands to Broadway Square Limited Partners. The HRA
needs to act a public hearing date (February 1, 1989) for
the disposition of said properties. Establishing this
date would allow for the proper length of time for
notice in the local newspaper. Everette Ellison made a
motion setting the date of February 1, 1989, 7:00 PM,
City Hall, as the public hearing date therebys meeting
statutory roquirmente of more than ten days but leas
than thirty days of notice in the local newspaper.
Ben Smith seconded the motion and without further discussion
the motion passed 3-0.
HRA Minutes - 1/11/U9
4. CONSIDERATION TO AUTHORIZE THE ESTABLISHMENT OF A PUBLIC HEARING
DATE FOR THE AC4UISITION AND DISPOSITION OF LANDS FOR TAX INCREMENT
DISTRICT NO. 1-8.
In compliance with the Minnesota Statutory the HRA shall hold
a public hearing for the aCqUiSitiOTt and disposition of lands with-
in a Tax Increment Finance District. The finance plan
having been appoved the HRA should consider setting a public
hearing date. The acquisition and disposition of lands are
described as the Westerly 3.22 acres of Lot 4, Block 3,
Oakwood Industrial Park, City of Monticello, from the City of
Monticello to the HRA and from the HRA to Northern States
Power Company. Everette Ellison made a motion setting the public
hearing date as February 1, 1989. 7:00 PM, City Hall,therebye
meeting statutory requirement and allowing more than ten
days but less than thirty days for publication in the local
newspaper. The motion was seconded by Ben Smith
and without further discussion the motion passed 3-0.
5. CONSIDERATION TO SET A SPECIAL HRA MEETING TO MAKE FINAL AWARD
OF SPECIFICATIONS AND BIDS FOR DEMOLITION OF O'CONNOR, STELTON,
AND JONES' PROPERTIES.
Koropchak informed the HRA that John Simola, OSM Civil Engineer,
and herself inspected the O'Connor. Stelton, and Jones' properties
in preparation of writing the specifications and bids for the
demolition of Steltons and Jones buildings. There appears
to be a common wall (double brick) the length of the Mini Mall,
Topels electrical box in attached to the Stelton rear building,
and samples of insulation, ceiling tile, and floor the from
the Steltous building were collected for asbestos analysis.
An invitation for bids will appear in the local newspaper
and the Minneapolis Tribune with received scaled bids to be
read aloud at the City Hall, Friday, February 10, 1989,
10:00 AM. It is suggested the HRA set a special meeting, Monday.
February 13, 1989, City Hall, 1:30 PM to consider bids and
make final award. Demolition to start no later than April 1.
Ben Smith made a motion to set Monday. February 13th at 1:30PM
as a special HRA meeting to make the final award for the
bid on the demolition of the Jones and Steltone buildings.
Seconded by Everotto Ellison and with no further discussion
the motion passed 3-0.
6. OTHER BUSINESS.
None.
7. ADJOURNMENT.
Everette Ellison made a motion to adjourn the HRA special meeting,
seconded by Don Smith, the special meeting adjourned at 1:45 PH.
011ie Koropchak
HRA Executivo Secretary
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Tuesday, January 3, 1989 - 7:00 PM
City Hall
MEMBERS PRESENT: Acting Chairperson Al Larson, Lovell Schrupp,
Ben Smith, and Everette Ellison.
CITY STAFF PRESENT: Administrator Rick Wolfsteller, Assist
Administrator Jeff O'Neill, and HRA
Director 011ie Koropchak.
1. CALL TO ORDER.
Acting Chairperson Al Larson called the HRA Annual meeting
to order at 7:05 PM.
2. APPROVAL OF THE DECEMBER 7, 1988 HRA MINUTES.
Lovell Schrupp made a motion to approve the December 7, 1988
HRA minutes, seconded by Everette Ellison the minutes stood
approved as read without further discussion. Approval 4-0.
3. CONSIDERATION TO APPROVE THE MODIFICIATION OF THE REDEVELOPMENT
PLAN RELATING TO REDEVELOPMENT PROJECT #1, MODIFICATION OF THE
TAR INCREMENT FINANCE PLANS RELATING TO TAR INCREMENT DISTRICTS
NOS. 1-1 THROUGH 1-7 AND THE APPROVAL AND ADOPTION OF THE
TAX INCREMENT FINANCE PLAN RELATING TO TAX INCREMENT FINANCE
DISTRICT NO. 1-8, ALL LOCATED WITHIN REDEVELOPMENT PROJECT 01.
Mr. Pat Peletring of Business Development Services, Inc.
was present at the HRA meeting and informed the members
that a few slight changes were made of modification documents
of a couple weeks ago. The new defined boundaries for the
Central Monticello Redevelopment Plan, Project 01 basically
Included the total city limits with the exception of R-1 and
R-2 zoning unless potential future redevelopment was foreseeable
as river development or blighted areas within these areas.
Mr. Peletring informed the HRA members that the District 48
Finance Plan Budget was increased to $34,000 to allow a leeway
for the potential lose of revenue because of the unknown
1989 tax capacity rate. DOS has boon working with Dougherty
Dawkins to finalize the dollar amount made available by
combining the seven tax increment finance plan into one finance
plan. Preliminary estimates indicate this could free up
1150,000 of reserve funds and additional monies could be made
available through refinancing the District's G.O. Bonds.
Mr. Polstring encouraged the HRA approve the resolution
approving the two modifications and adopting the Tax Increment
District No. 1-8 Finance Plan to comply with statutory
authorization and to meet the original goals set by the
HRA. Everette Ellison made a motion to approve the Modification
of the Redevelopment Plan relating to Redevelopment Project /l,
Modification of the Tax Increment Finance Plans relating to
Tax Increment Districts Nos. 1-1 through 1-7, and the approval
and adoption of the Tax Increment Ftnace Plan relating to Tax
BRA Minutes - 1/3/89
3. CONTINUED.
INCREMENT FINANCE DISTRICT NO. 1-8, ALL LOCATED WITHIN
REDEVELOPMENT PROJECT O1. Ben Smith seconded the motion
and with no further discussion the motion passed 4-0.
Koropchak asked Mr. Pelstring about the HRA's role in providing
a higher quality of housing for the elderly (example townhouse
close to downtown area). Mr. Pelstring's response was if
a Housing District was created than Statutory reads that 2/3
of the units must to available to low and moderate income.
He suggested that if at all possible to tie the project with
a blighted area therefore being able to create a Redevelopment
District which is not limited to low and moderate income.
Mr. Pelstring will inform or check with potential interested
developers regarding the HRA's interest to provide a higher
quality of housing (townhouses) for the elderly within walking
district of shopping, churches, etc. The HRA may also publicize
for a Request for Proposal. Mr. Peletring cautioned the HRA
that rental development allows for the developer to be in the
deal therefore guarantees the increment. Also, he suggested
the developer provide two per formas with the use of Tax Increment
Finance and without Tax Increment Finance.
Mr. Pelstring informed the HRA that he is working with Dougherty
Dawkins (muncipal bond writer) to assist him with the research and to
advise of the most beneficial options of refinancing the
General Obligation Bonds of the current seven Tax Increment
Districts. Mr. Pelstring will meet with City staff and thereafter
at the February let HRA will present the commissioners with a
proposal inclusive of options and policies for refinancing.
Mr. Polstring advised the HRA that his work time is still
within the 65 hours not to exceed contract.
4. CONSIDERATION TO SELECT AND RECOMMEND A NEW HRA MEMBER FOR
MAYOR AND CITY COUNCIL APPOINTMENT AND TO RECOMMEND CURRENT
HRA MEMBERS FOR MAYOR AND CITY COUNCIL ANNUAL APPOINTMENT.
Koropehok informed the HRA members of the five letters mailed
to potential HRA candidates: Mr. Kendall, Mr. Drayna, Mr. St.
Hilaire, Mr. Mayor, and Mr. Pribyl; positive responses were
hoard from Mr. Drayna and Mr. St. Hilaire. The members
recognized the public interest both candidates possess,
dicussed the flexiblity of Mr. Drayna's time with involvmont
of school athletics. Mr. St. Hilaire has expertise in
finance/investment and as anindepandent consultant his time
is more flexible. Ben Smith made a motion to recommend
Mr. Tom St. Hilaire to fill the vacated HRA position with
an expiration date of December 1991 and Mr. Al Larson for
a second term with an expiration date of December 1993
for Mayor and City Council appointment. Everette Ellison
i seconded the motion and with no further discussion the motion
passed 4-0. Mr. St. Hilaire was recommended because of
his expertise in finance/investment and flexibility of time.
HRA Minutes - 1/3/89
5. CONSIDERATION FOR USE OF TIP FOR HARTIE FARM SERVICES.
Mr. Russ Martie contacted the HRA office and requested the use of
Tax Increment Financing for his proposed development of a
7,164 metal facility (construction in 1990) on the westerly
1.936 acres of Lot 1, Block 3, Oakwood Industrial Park.
Estimated land purchase date is 1989. Retention of current
employment plus additional 2. Although, Mr. Martie's operation
currently is commerical he would be classified as industrial
by the installation of bird seed production equipment. He
request TIF to write down the land cost, however, I did
advise him that to purchase the land is 1989 and certify
a tax district and construction in 1990 would be a lose
of one year of collectible increment. If the development
met TIF requirements the HRA's consensus was to assist
Mr. Martie with TIF because the commissioners are interested
in assisting small local existing businesses with expansion.
6. CONSIDERATION OF TIF DISTRICT 92 UPDATE.
The HRA members accepted the written report in the agenda
supplement.
7. CONSIDERATION TO REVIEW CONSTRUCTION FIVE REVISED SITE PLAN
AND USE OF TAX INCREMENT FINANCE.
The November 14 City Council minutes read: It was the con-
sensus of the Council that using tax increment financing
for the installation of a storm sewer was undesirable.
After notifying the developers. Gus and Gary LaFromotse, of the
City Council's decision, they requested the HRA hear their rationale
of why this project is a good use of tax increment financing.
Mr. Gus LaPromoise pointed out these reasons:
1. Increased aesthetic value.
2. Potential of 40-60 jobs.
3. wants to be treated the same as other developers
4. Benefits to the City were previous extension of Luring
Lane and donation of park land.
5. Sufficient tax increment to retire the debt service.
6. Local taxpayer must compote with subsidized rental.
7. Better utilization of land.
8. Increase in local tax base.
9. Potential business expansion of 16 leased bays.
10. Some storm sewer maintenance to City, but not a lot.
11. Not feasible to reduce the project.
?fie project includes the construction of a 18,180 aq ft office/
warehouse (9 boys for lease), the construction of a 13,900 eq
ft offico/warehouse (7 bays for lease), construction of two
block mini stroage facilities, one 5,600 eq ft and the other
It 8,400 sq ft. Total estimated market value is $1,174,000 with
a projected annual tax increment of $46,000.
HRA Minutes - 1/3/89
7. CONTINUED.
Jeff O'Neill had videoed the similiar development in Long Lake,
however, the commissioners felt comfortable with the concept
by the displayed photos. Koropchak reported she had telephoned
the property manager of the Long Lake development and was
informed the average employment of each bay was 7-8 persons
and approximately 60S of the businesses were from other locations
other than Long Lake.
Mr. Wolfsteller reiterated the Council's concern of the storm
sewer's installation: the depth of the pipe, the impact with a
stacking effect in conjunction with the current sanitary sever,
loss of ground water absorption, and additional maintenance
cost.
Although, the HRA does agree to some degree with the Council's
rationale, they did consider the project to meet the TIF
objections of a substantial increase to the local tax base,
creation of 40-60 jobs, increase of aesthetic value, and public
utilities are legitimate use of TIF.The HRA did agree that
developers should be treated the same and developers of rental
property compete with subsidiced rental units. Lowell Schrupp
made a motion to consider the use of Tax Increment Financing
for the 516.5 ft plus connection of 60 inch storm sever (estimated
�. 170,000) installation and the 285 ft of 30 inch storm sever ($20,000) along
Lauring Lane exclusive of any other developer's project cost
and with the developers guarantee to construct the buildings planned
as presented for review and described above. The motion was
seconded by Everette Ellison and without further discussion
passed 4-0.
S. CONSIDERATION TO SET 1989 HRA COALS.
A subcommittee of Acting Chairperson Al Larson, HRA Director
011ie Korpchak and Assist Administrator Jeff O'Neill was appointed to
establish the 1989 goals for recommendation to the HRA members
for approval at the February 1 meeting.
9, OTHER BUSINESS.
It was suggested that Koropchak mail Hr. St. Hilaire, after appointment
by the Mayor and Council, a copy of the previous six months HRA
agendas and minutes.
10. ADJOURNMENT.
The NRA meeting adjourned at 10:15 PM by a motion from Everette
Ellison and seconded by Ben Smith.
011ie Koropchak
HBA Executive Secretary
HRA AGENDA - 2/1/89
3. PUBLIC HEARING FOR THE DISPOSITION OF LANDS TO BROADWAY SQUARE
�. LIMITED PARTNERS.
A. REFERENCE AND BACKGROUND.
The public hearing notice having been published in the local newsapaper
January 19 and January 26, the HRA Chairperson may open the public
hearing to allow interested persons to submit oral or written
comment.
Some months ago, the Monticello Housing and Redevelopment Authority
purchased and demolished the Monticello Ford building/property.
Currently, the BRA holds executed purchase agreements with Connors,
Steltons, and Jones with a closing date scheduled for on or before
March 1, 1989. The City Council approved the plans and specifications
for the demolition of the Stelton and Jones buildings with received
sealed bids to be read aloud at the City Hall, Friday, February 10,
1989, 10:00 AM with final award by the HRA, Monday, February 13, 1989,
1:30 PM, City Hall. After a developed negotiable and executed
Development Agreement between the HRA and the developers, Broadway
Square Limited Partnere, the HRA should consider tranferring the raw lands
described as
Lot 1 exc Nly 30 ft, Block 51
Lot 2 exc Nly 30 ft 6 Lot 3 exc Nly 30 it of W 24 ft b
W 7 1/2 ft of Lot 4, Block 51
Nly 30 ft of Lots 1 b 2 6 Nly 30 ft of W 24 ft of Lt 3.
Also S 15 ft of Lot 15, Block 51
E 25 1/2 of Lot 4 6 W 5 1/2 ft Lot 5, Block 51
Lot 5, Block 51, exc W 5 1/2 ft (50Mis-92) Original Plat
to the Broadway Square Limited Partnere for the sum of Fifty-six
Thousand Dollars ($56,000) for the construction of an 28 -unit
subsidised elderly home.
The estimated market value of the planned project is $756,537
with a projected annual tax increment of 112,836.16 with the total
projected annual District tax increment of 135,071.49. The
project cost will be financed through the annual collection of
tax increment and/or the HRA reserve funds.
Assuming no public contested comments, the HRA Chairperson may
close the public hearing and ask the HRA to consider a motion
to approve the resolution or deny approval of the resolution auth-
orising the transfer of the said property from the HRA to the
developer, Broadway Square Limited Partnere.
B. ALTERNATIVE ACTIONS.
1. Approve the resolution authorising the transfer of the above
described raw lands to the developer, Broadway Square Limited
Partnere.
HRA AGENDA - 2/1/89
j 2. Deny approval of the resolution authorizing the transfer
�l of the above described raw lands to the developer, Broadway
Square Limited Partners.
C. STAFF RECOMMENDATION.
Staff recommends the HRA approve the resolution authorizing the
transfer of the above described raw lands to the developers,
Broadway Square Limited Partners, with the condition that a
Development Agreement is developed and signed by the developers
and the HRA prior to transfer. Land cost tranfer is 456,000.
Staff recognizes the exorbitent cost of the project, however,
supports the HRA original objectives of the project: 1) Provide
opportunities for development and expansion of new business;
2) Provide opportunites for growth of the tax base; 3) Eliminate
blight or deterioration within an area; 4) Create a use for
currently under-utilized land; and 5) Provide needed subsidized
elderly housing.
D. SUPPORTING DATE.
Copy of the public hearing notice,
ROP 10—MSntice0a (Minn.) Times, Thursday, Jen. 28, 1989
�.. Neallotice _ s
Public
110T106 OF PUBLIC NeAR610
DISPOSMON OF PUBLIC LANDS
Nods is hWtby given"a Public hexing
will be held at 7 P.M. on Waoheaday.
Feb. 1,
. 1589. In me Mdntleao0 Cur Cotard CJtanmera.
230 Fut Am wad. Monticello. Minnesota
30.782. for the ouroow CO acceotng cmwnent
on the oropoaso rile by the Monticello Nous•
kq arN Redevelopment Authority 4 Broadway
8atnae Untied Pwmm, a Mlnnpota limited
pannuaNp, of the following Property:
Lm 1 am fay 20 ft. Block 31, Monticello
Odpktel Rat. Wright Ccatty. MJnnesaa.
Lot 2 esc Nh 20 ft. 6 Lot 2 em Noy 20
n of W 24 h, e W 7 K ft, of Lot a, Block
81, Monticello Ork" Plat. WrIpM
County. Mimeos.
e26% ft. of Lot a and W 6% f, of LN
.6. Block 61, Monticello Original Flat.
Wright County, MWRWW$.
Lot S. Block Sl, eso thew 6% h. Mon.
tloNb Orlphal Flat, Wright County.
' MWroso4.
Nlv 20 h. of Lou 1 8 2 and Nlv 20 N.
of W 24 fl. of Lot 2 and also the S 16
h. of Lot 16, Stock Sl, Monticello
OdpinN Plat, Wright County. Minnesota.
The pfopoaad sad on within Tu Increment
RedevNopmenl OistHM No. 1.2 and the
h=f,Z FNanca Plan. Antrom wig" to sub-
mit con"T4M should Submit said con~t3
to the office of the City Admnistrator no 4tx
than 7 a.m., Wadheaday,.Feb. 1. 1069.
—Olive Koroochak. DIrMcf, Monticello
Np�slnp and Radavebpnryftt AutltoritV
Nan. 19 a 26, I98M
HRA AGENDA - 2/1/89
4. PUBLIC HEARING FOR THE AC4UISITION AND DISPOSITION OF LAND
FOR TAX INCREMENT DISTRICT NO. 1-8.
A. REFERENCE AND BACKGROUND.
The public hearing notice having heen published in the local
newspaper January 19 and January 26, 1989, the HRA Chairperson
may open the public hearing to allow interested persona to
submit oral or written comment.
Assistant Administrator Jeff O'Neill having negotiated with
Mr. Donald Sass, Northwest Division Manager, Northern States
Power Company, a land cost sale of $1.00 for the Westerly 3.22
acres of Lot 4, Block 3, Oakwood Industrial Park and the
purchase of the existing NSP Maintenance Building on West
County Road 75, City of Monticello for city maintenance use.
The proposed development is a 5,460 sq ft metal facility
with a $196,213.50 Estimated Market Value and a projected
annual increment of $6,214.54. Employment is the retention
of jobs plus a potential of two additional jobs. After the
establishment of the development agreement and the development
agreement signed by the HRA and the developer, Northern States
Power Company, the HRA may consider the acquisition of the raw
lands described as
Westerly 3.22 acres of Lot 4, Block 3, Oakwood Industrial
w
Park. City of Monticello. Wright county
from the City of Monticello at a land cost of $21,200 plus
Improvement cost of 11,800 with the disposition of the said
lands to Northern States Power for 11.00.
Assuming no public contested comments, the HRA Chairperson may
close the public hearing and ask the HRA to consider a motion
to approve the resolution or deny approval of the resolution
authorizing the transfer of the said lands from the City of
Monticello to the HRA and from the HRA to Northern States Power.
B. ALTERNATIVE ACTIONS.
1. Approve the resolution authorizing the transfer of the above
described raw lands from the City of Monticello to the HRA and
from the HRA to NSP.
2. Deny approval of the resolution authorizing the transfer
of the above described raw lands from the City of Monticello
to the HRA and from the HRA to NSP.
C. STAFF RECOMMENDATION.
Staff recommends the HRA approve the resolution authorizing the
transfer of above described raw lands from the City of Monticello
to the HRA (123,000) and from the HRA to the developer, NSP (11.00).
HRA AGENDA - 2/1/89
S 4. CONTINUED.
with the condition that a Development Agreement is developed and
signed by the developers and the HRA prior to transfer. Staff
recognizes the impact of the quick service to local residents
and businesses through a Monticello location of the NSP'
Maintenance Facility. The City Council and the HRA having
found TIF District No. 1-8 to be in the public interest
because:
1. It will discourage commerce, industry, or manufacturing
from moving their operations to another state; or
2. It will result in increased employment is the municipality;
or
3. It will result in preservation and enhancement of the tax
base of the municipality.
Finding that the proposed development, in the opinion of the
Council, would not occur solely through private investment
within this reasonable foreseeable future, and r berefore, the
use of tax increment financing is deemed necessary.
City staff has reviewed the available financing costs for the
bdevelopment. Due to the high costs of the public improvements,
the project would not be financially feasible without the
City's assistance. This is an excert Eros the resolution
adopted the TIP Plan for District No. 1-8 by the City Council.
D. SUPPORTING DATA.
Copy of the Public Hearing Notice.
t
I
Pape 10—Monticello (Minn.) Times, Thursday, Jen. 28, •1989 I
""AreaNotices
. .
Public.
NOT1Ce OF PUSUC HEAR=
DISPOSmON OF PuBUC LANDS
Notice u hereby given that a public Mame
wi l be held M 7 p.m. on WedrrWsr. Fab. 1.
1889. in Ue Monode90 CIH Caund Charnbas.
260 EM smadwey. Momieeft Mimesots
66382. for the owPose of eceoo" Comment
on theprOpOaad ectNWtFon end eubsewent
IM
by do Mamre*no Nouwqend ReWverop•
Ment Auttl" to No oI*M Stats Power Com•
• Mlnnesote Corporation. of the follow. .
wmmrtv '3.22 acres of Lot s. Bloat 3.
Oakwood IMuatr,W Part• Ciry of Mon•
1� tleello. Minnesota. Wri�tt CoumY.
TM proposed ante b pat of Me NRA I
RedevatooMent Plan end U Intended to be in• I
j chid M Tom Increnrnt Disttkt No. 1.8.
1 AIrypNwititltp q wtMltlt WmnMnq should
submit tail Cbmmenq to die office of the Ciry
Adminavtror no Ister then 8:00 S.M. Wednp-
dav, Feb. 1, 1989.
�Opve KoranChat. Obectw. kftmtICdU0
uM�W Redeveiopmant AUVwntV
s 2e. +seal
HRA AGENDA - 2/1/89
8. CONSDIERATION TO ELECT THE HRA CHAIRPERSON AND VICE CHAIRPERSON.
r
A. REFERENCE AND BACKGROUND.
Al Larson was elected Acting Chairperson of the HRA at the
December meeting. With formal appointmcnts of HP.A members
by the City Council in January, recommendation is for the
HRA members to elect Al Larson as HRA Chairperson for the
length of his term and to elect a HRA Vice Chairperson on
an annual basis to serve in the absence of the Chairperson.
9. CONSIDERATION TO APPROVE RECOMENDED 1989 HRA GOALS.
Al Larson, Jeff O'Neill, and Koropchak met Friday, January 27th
to establish 1989 HRA Goals. The goals established by the
subcommittee are recommendations to the HRA members for review.
comments, additions/subs tractions, and/or approval/ denial.
A. SUPPORTING DATA.
Copy of the 1989 Recommended HRA Goals.
1989
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY GOALS
1989 HRA OFFICERS AND MEMBERS: Al Larson, Chairperson
Lowell Schrupp
Ben Smith
Everette Ellison
Tom St. Hilaire
GOALS: A. To establish guidelines/policies for the use of
Tax Increment Financing.
B. To research the housing stock and assist in the provision
of adequate numbers and types of housing.
1. Higher quality elderly housing close to downtown with
a townhouse concept.
2. Elderly housing with total full services available.
3. Rehabilitation of existing low income homes.
C. To research and designate neighborhood substandard,
\o%�%* V e,.._, or deteriorating areas for redevelopment.
D. To continue the joint meeting between the IDC, the HRA,
the EDA, the Planning Commission, and the City Council.
E. To adhere to the Joint Powers Agreement between the NRA,
the EDA, and the City Council.
F. To consider a 1990 limited mill levy for redevelopment
project and planning activities; and/or for informational
and relocation services.
011io Koropchak
HRA Director
11
DOUGHERTY DAwKIIVS
December 27, 1988
Mr. Pat Pelstring
Vice President
Business Development Services, Inc.
8990 Springbrook Drive, Suite 230
Minneapolis, Minnesota 55433
RE: Proposed Monticello, Minnesota Tax Increment
Refunding Bonds
Dear Pat:
I have reviewed the preliminary cash flows you have provided me on
Monticello's existing tax increment districts. I appreciate the
opportunity to consult with you on this matter, and I agree with you
that the creation of a maotor development district incorporating the
seven existing tax increment districts presents an exciting
opportunity for the City to refund its existing tax increment debt
with several immediate substantial economic and managerial benefits
to the City. As we discussed, we will need to review the existing
financing documents and determine the City's "now money" needs, if
any, before preparing a detailed analysis of the financing options
and prospective savings for the City. The purpose of this letter is
to communicate the refunding options which we believe are available
to the City and the benefits of a refunding.
EXISTING TAX INCREMENT DISTRICTS AND FINANCING
It is our understanding that the City presently has seven Tax
Increment Districts. The Districts aro a mixture of Economic
Development and Redevelopment Districts. Three Districts (Is 3, 5
and 7) have tax exempt bond issues outstanding, one District (16) has
a taxable bond issue outstanding, and throe Districts (1s 1,2 and 4)
have boon financed internally through loans from the City's General
Fund. The total tax exempt debt outstanding is approximately
$645,000, the total taxable debt outstanding is approximately
$350,000, and the total of the existing internal loano is
approximately $243,000.
We also understand that the City is presently negotiating at least
one additional project and anticipate sovoral future projects.
DouaHEM.DAWKINS,STRAND A YOSTINCORPONATED
wo DORnI nRM 6 n1ERT, 6UrM 1700
MD7NRAPOLA& MUQNNYUTA 53107
412.741.9000
REFUNDING BONDS
�. We believe that iu conjunction with the creation of a master
Development District, that general obligation tax exempt bonds could
be issued for one or more of the following purposes in the
approximate amount of $800,000-$1,200,000:
1. Refund the three outstanding tax exempt bond issues in the
approximate amount of $645,000;
2. Refund the existing three internal loans from the General Fund
in the approximate amount of $243,000 and repay the General
Fund (assuming that any underlying developer guarantees on
these loans would not cause the bonds to be taxable);
3. Bond for amounts necessary to finance new TIP projects;
4. Reimburse the City for costs incurred with respect to its TIF
activities which have not been previously recovered; and
5. Bond for the City's administrative expenses incurred with
respect to the Districts.
We believe that the refunding bonds could be sold in today's market,
assuming a 15 year maturity, for an average interest cost of 6.75-
7.00%.
Additionally, taxable general obligation tax incremont bonds could
be sold in conjunction with the tax exempt bonds as a separate serius
to refund the outstanding taxable bonds on Uistrict 6, and any of the
Internal loans which may be taxable because of developer guarantees,
to the extent this may be desirable to (1) reduce debt service;
(2) release the District 6 pledge of tax increment revenues to make
excess increment available for other purposes, and/or (3) repay the
General Fund with respect to the internal loans. We believe that the
taxable bonds could be sold at a rate approximately 75 basis points
over treasury yields on comparable maturities. Assuming a 15 year
maturity, the net interest cost on the taxable bonds in today's
markets would be approximately 9.50-9.75%.
BENEFITS OF REFUNDING BONDS
We believe the refunding will provide numerous benefits to the City:
1. Reduce Debt Service. We have not had an opportunity to review
the outstanding bond issues. However, current tax exempt
rates are lower than at most times in the 1980s except for
most of 1986 and the first quarter of 1987. It is also our
understanding that the interest rates on the general fund
loans are in the 8-10% range. Therefore, we believe it is
likely that the refunding will significantly reduce debt
service, thereby increasing excess increment available to
finance new projects, prepay debt or return to the taxing
jurisdictions.
2. Improve Cash Flow. The refunding bonds can be structured to
match overall tax increment receipts to overall tax increment
obligation, thereby improving annual cash flow.
3. Free UR Excess Increment. The refunding bonds would be sold
vith a general obligation pledge and a pledge of tax increrzont
revenues on an annual basis. Any existing required tax
increment reserves would be released and any additional excess
tax increment generated by the Districts as a whole would be
available for additional projects in the Development District,
reduction debt or for return to the taxing jurisdictions.
4. Reduce General Fund Exoosure. Existing loans for the General
Fund would be immediately repaid. Additionally, in the
future, if any single Tax Increment District runs into cash
flow problems, excess increment from other districts would be
available to pay related bond debt service prior to any claim
on the General Fund. This is not true under the existing
structure.
5. Simplification and Administrative Efficiency. Four or more
bond issues with different terms, covenants and payment dates
would be replaced by a single bond issue. This will eliminate
the requirements of differing pledge covenants, reduce staff
responsibilities and transaction expense, reduce bookkeeping
and make it much easier for the City to determine the
financial results of its Districts as a whole.
6. Provide Mechanism for Pinancing of Future Projects. Through
debt service reduction, expense recapture, pooling of excess
increment and, if desired by the City, present financing for
planned future projects, the City can provide for the
financing of future tax increment projects of moderate size
without resort to additional bond issues or general fund
loans.
I look forward to tho opportunity to meet with you and the City to
structure a financing program and bond issue to achieve these goals.
Veru' yours,
Wood Kidner
Vico President
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