HRA Agenda 03-22-1989AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, March i. 1989 - 7:OOPM
9 •
MEMBERS: Chairperson Al Larson, Lovell Schrupp, Ben Smith,
Everette Ellison, and Tom St. Hilaire.
CITY STAFF: Rick Wolfateller, Jeff O'Neill, and 011ie Koropchak.
GUEST: Pat Pelstring, Business Development Services, Inc.
Debbie Grams, Business Development Services, Inc.
1. CALL TO ORDER.
2. APPROVAL OF THE FEBRUARY 1 AND FEBRUARY 21, 1989 HRA MINUTES.
3. CONSIDERATION OF A DISCUSSION WITH POTENTIAL DEVELOPERS ON THE
QUALITY ELDERLY TOWNHOUSE CONCEPT.
4. CONSIDERATION TO REVIEW TIF POLICIES AND PROCEDURES.
5. CONSIDERATION OF AN UPDATE ON THE RELINQUISHING OF THE PLEDGE
AGREEMENT AND REFINANCING OF THE DISTRICT GENERAL OBLIGATION
BONDS.
6. OTHER BUSINESS.
7. ADJOURNMENT.
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, February 1, 1989 - 7:OOPM
City Hall
MEMBERS PRESENT: Chairperson Al Larson, Lowell Schrupp. Ben
Smith, Everette Ellison, and Tom St. Hilaire.
STAFF MEMBERS PRESENT: Rick Wolfsteller, Jeff O'Neill and HRA
Director 011ie Koropchak.
1. CALL TO ORDER.
Acting Chairperson Al Larson called the ARA meeting to order
at 7:05PM.
2. APPROVAL OF THE JANUARY 3, 1989 AND JANUARY 17, 1989 HRA MINUTES.
Ben Smith made a motion to approve the January 3 and January 17,
1989 HRA minutes, seconded by Everette Ellison, and with no
further discussion the minutes stand approved as written by
a 4-0 vote.
3. PUBLIC HEARING FOR THE DISPOSITION OF LANDS TO BROADWAY SQUARE
LIMITED PARTNERS.
Acting Chairperson Al Larson opened the public hearing to allow
Interested persona to submit oral or written comment for the
transfer of raw lands from the HRA to developer, Broadway Square
Limited Partnere, raw lands described as
Lot 1 exc Nly 30 ft, Block 51
Lot 2 exc Nly 30 ft 6 Lot 3 exc Nly 30 ft of W 24 ft 6
W 7 1/2 ft of Lot 4, Block 51
Nly 30 ft of Lots 1 6 2 6 N)y 30 ft of W 24 ft of Lot 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, oxc W 5 1/2 ft (50Mis-92) Original Plot.
for the sum of Fifty-six Thousand Dollars ($56,000). With no
public comment the public hearing was closed and the Acting
Chairperson called for a motion. Lowell Schrupp made a motion
that the HRA approve a resolution authorizing the tranfor of
the above described raw lands to the developers, Broadway
Square Limited Partnere, with the condition that a Development
Agreement is developed and signed by the developers and the
HRA prior to tranfor. Land cost tranfor to $56,000. Seconded
by Ban Smith and further discussion included the possible
funding of the project through the HRA excess funds created
by the refinancing of tax increment bonds if no development
ARA Minutes - 2/1/89
3. CONTINUED.
agreement is signed. No purchase deadline date was established
between the HRA and the developer. With no additional discussion
the motion passed 5-0 meeting the HRA original objectives of
the project: 1) Provide opportunities for development and
expansion of new businesss; 2) Provide opportunities for growth
of the tax base; 3) Eliminate blight or deterioration within
an arca; 4) Create a use of ucrrently under-utilized land; and
5) Provide needed subsidized elderly housing.
4. PUBLIC HEARING FOR THE ACgUISITION AND DISPOSITION OF LAND
FOR TAX INCREMENT DISTRICT NO. 1-8.
Acting Chairperson Larson opened the public hearing to allow
interested persons to submit oral or written comment for the
acquisition of raw lands from the City of Monticello to the
HRA and the disposition of raw lands from the HRA to developer,
Northern States Power Company. Raw lands described as
Westerly 3.22 acres of Lot 4, Block 3, Oakwood Industrial
Park, City of Monticello, Wright County.
With no public comment the public hearing was closed and the
Acting Chairperson called for a motion. Ben Smith made a
motion that the HRA approve a resolution authorizing the transfer
of above described raw lands from the City of Monticello to
�. the HRA for the sum total of $21,200 and from the HRA to the
developer for the sum total of $1.00 with the condition that
a Development Agreement is developed and signed by the developers
and the HRA prior to transfer. Seconded by Everette Ellison
and with no further discussion the motion carried unanimously
meeting the public interest: 1) it will discourage commerce,
industry, or manufacturing from moving their operations to
another state; or 2) It will result in increased employment
in the municipality; or 3) It will result in preservation and
enhancement of the tax base of the municipality.
5. CONSIDERATION TO REVIEW THE RESERVE FUND CREATED BY COMBINATION
OF THE DISTRICT TIP PLANS AND.OR BY RELINQUISHING THE PLEDGE
AGREEMENTS, AND TO REVIEW THE POTENTIAL REFINANCING OF TAX
DISTRICT GENERAL OBLIGATION BONDS.
Mr. Pat Polstring summarized the benefits of refunding bonds
to the HRA member: 1) Reduce Debt Service; 2) improve Cash
Flow; 3) Free Up Excess Increment; 4) Repay General Fund
Loans and Reduce General Fund Exposure; 5) Simplification
and Administrative Efficiency; 6) Provide Necessary Financing
for District No. 2. Proposed NSP Project and Future Projects
Moro Efficiently. Refunding Bond Sources are bond sale.
$1.2 million and Pledge Agreement, approximately $128 thousand.
Refunding Bond Uses are pay off of TIP City Loan 61. $20 thousand;
HRA Minutes - 2/1/89
Load 42, $24 thousand; Loan 64, $100 thousand; refunds from
TIF 03 bonds, $113 thousand; Bond /5, $364 thousand; bond 06,
$351 thousand; monies available for proposed Districts 42 and
08, $300 thousand; issuance cost, $25 thousand; underwriter's
Discount, $24 thousand; contingency $3 thousand.
The cash fund use becomes a public policy decision to have
excess monies . Return to the county, school, or hospital
districts or reserve funds used for city projects such as
elimination of blight. The excess $300 thousand is a savings
on capitialized interest, need for no interest loans, and the
availablity of monies for small projects.
City Administrator Rick Wolfateller stated that refunding bonds
would simplify payments, the projected interest rate and the
issuance cost are a wash, terms match, bond market cost are
positive for this year anyway, and provides flexibility for
the HRA.
Lowell Schrupp made a motion directing City Staff to proceed
with the necessary steps for the relinquishing the Pledge
Agreements and refinancing the District General Obligation
Bonds inclusive of a recommendation to the City Council for
approval. Seconded by Tom St. Hilaire, the HRA was informed
the City Council would need to hold a public hearing for the
bond sale. With no further discussion the motion passed 5-0.
Dougherty Dawkins fees are contingent upon bond sale only.
6. CONSIDERATION TO REVIEW POLICIES/GUIDELINES FOR THE USE OF TIF.
Acting Chairperson Al Larson requested the HRA set policies/
guidelines for the use of TIF to assist the members with
who should be granted the use of TIF (NSP, Construction Five,
Martie Farm Service). Mr. Pelstring advised the NRA that
an application form could be developed for preliminary screening.
Koropchak informed the HRA members that we have such a form
however city staff is somewhat negligent'with it's use.
Pelstring briefly explained a process used in Woodbury. The
use of TIF for industrial 1s the most liberal because it's
most competitive (if possible fund 13-18% of the project cost);
commerical write down to market value and remaining balance is
a loan, housing for the benefit of the people moving in (public
benefit) request proforma analysis with the use of TIP and
without the use of TIF. Use TIF for public Improvements such
as roadways on projects that aro marginal. Commerical/ratail
use with public purpose of elimination of blight. The HRA
has the authority to bufldabuilding but not with the use of
TIP. hr. Pelstring will develop and present a preliminary
draft of guidolines/policies for the HRA at the March mooting.
HRA Minutes - 2/1/89
1. CONSIDERATION TO DISCUSS POTENTIAL DEVELOPERS FOR QUALITY
ELDERLY HOUSING.
Mr. Pelstring informed the HRA that he knew of two potential
developers who are interested in the concept of providing
quality elderly housing as stated in the HRA goals. They
have participated in similar projects. Ben Smith and Jeff
O'Neill will identify areae within Monticello as potential
sites by the next HRA meeting and Mr. Pelstring will
invite the two developers to the HRA meeting.
8. CONSIDERATION TO ELECT THE HRA CHAIRPERSON AND VICE CHAIRPERSON.
Ben Smith made a motion to appoint Al Larson as the HRA Chairperson
for the remaining of his term, seconded by Everette Ellison the
motion carried 4-1. Al Larson abstained. Lovell Schrupp made
a motion to appoint Ben Smith as the HRA Vice Chairperson for
a one year term, seconded by Everette Ellison the motion carried
4-1. Ben Smith abstained.
9. CONSIDERATION TO APPROVE RECOMMENDED 1989 HRA GOALS.
The HRA members reviewed the 1989 HRA Goals as recommended
by Al Larson, Jeff O'Neill, and Koropchak. Chairperson
Larson suggested his preference to use the word (blight in
place of slum) under Item C. With no further corrections
t or discussion Lowell Schrupp made a motion to accept the
1989 HRA Goals as presented and with the correction as
stated by Chairperson Larson. Ben Smith seconded the
motion which passed 5-0.
10. CONSIDERATION OF AN UPDATE TO TIP DISTRICT 05, CONSTRUCTION FIVE.
At the City Council meeting, Koropchak requested the authorization
for a feasibility study for the installation of the storm savor
along the easterly boundary of Outlet A and Lauring Lane.
John Simola still in opposition of the Outlet A storm sever
installation suggested the City Staff meet with Construction
Five to determine adequate parking spaces wherebye the
potential to reduce the length of the storm sever installation.
A meting date between city staff and Construction F.ivo.has boon
Got. City Council received Gus LaFromboise list of reasons
by to use TIF for this project.
11. OTHER BUSINESS.
None.
12. ADJOURNMENT.
Everette Ellison made G motion to adjourn, seconded by Lovell
Schrupp, the HRA meeting adjourned.
011ie Koropchak, HRA Executive Secretary
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Tuesday. February 21, 1989 - 7:OOPM
City Hall
MEMBERS PRESENT: Chairperson Al Larson, Lowell Schrupp, Ben
Smith, and Tom St. Hilaire.
MEMBERS ABSENT: Everette Ellison.
CITY STAFF PRESENT: Rick Wolfsteller and 011ie Koropchak, HRA Director.
CITY STAFF ABSENT: Jeff O'Neill.
1. CALL TO ORDER.
Chairperson Al Larson called the special BRA meeting to order
at 7:OOPM.
2. CONSIDERATION OF PROPOSAL BY WEST PRAIRIE PARTNERS FOR TAR
INCREMENT FINANCING.
Mr. Jim Metcalf of West Prairie Partnership informed the
HRA of three possible options for redevelopment of the
following properties: former Baptist Church, Reed, Gille
Auto, and Katzmarek. One option would require consideration
of the use of tax increment financing by the HRA. Also,
Mr. Metcalf advised the HRA if they were prepared to consider a
recommendation for rezoning the area from R-2 to R-3 to
the Planning Commission or the City Council regarding
their proposal.
Current status of the properties as outlined by Mr. Metcalf.
1. Former Baptist Church acquired by West Prairie Partnership.
2. West Prairie Partnership has option of the Reed property
and signed request by Reed to rezone from R-2 to R-3.
3. West Prairie Partnership has no option of the Gills Auto
property but has signed request by Fred Cille to rezone
from R-2 to R-3.
4. Katzmarek has no interest in selling.
Three possible options as outlined by Mr. Metcalf.
1. Develop the former Baptist Church into 6 or 7 residential
Iota or townhousos which are appropriate uses for R-2.
2. The HRA acquire, raze, and place the Read and Gillo properties
on the market for redevelopment therebye eliminating a blighted ares
3. Do nothing with the Read and Cille properties and lot time
resolve the issue.
HRA Minutes 2/21/89
2. CONTINUED.
Other comaents made by Mr. Metcalf.
1. If the area was rezoned to R-3. West Prairie Partnership
makes no guarantee to go through with development at this time.
2. Preliminary estimated figures to acquire and raze the
Reed and Gille properties was $400.000 not feasible for single
resident redevelopment.
3. Area residents are opposed to rezoning from R-2 to R-3.
4. Monticello townhouse and apartment market is presently
saturated.
5. Acquisition and raze of properties by the HRA would eliminate
blight.
6. Possible soil contamination from buried unused gasoline tanks.
7. Request for rezoning scheduled for Planning Commission on
March 7 and City Council on March 13.
8. Elimination of blight is an asset to Par West, the Country Club.
and the neighborhood.
Mr. Metcalf thanked the HRA for listening to their proposal/concerns
and departed the meeting. Chairperson Larson asked two neighborhood
residents present at the meeting (Karen Doty and Tom Moore) As
taxpayers what would they like to see develop in the area? They
were not opposed to redevelopment and cleaning up of the area
but want the zoning to remain as R-2 and preferred development of
residential lots however aren't opposed to townhouses.
The HRA's decided to refrain from any zoning recommendation or
any use of tax increment financing because no definite plana or
information was presented to the HRA by West Prairie Partnership.
3. CONSIDERATION OF REVIEWING AND AWARDING BIDS ON DEMOLITION OF
STELTON'S LAUNDROMAT AND JONES MANUFACTURING BUILDINGS.
Opening and reading aloud of the bids for demolition of the
Stelton and Jones buildings was held on Friday, February 10. 1989
at the City Hall Council Chambers with law bid of $5,200 by
Schluonder Construction and high bid of $18,300 by Schroder
Excavating of Sauk Rapids, Minnesota. A total of nine bids
were received. As part of the bid requirements, the City had
requested a bid security consisting of a bid bond, certified
check, or cash equivalent in the amount of 5 percent of their
bid. The low bidder, Schluander Construction submitted a personal
check as their bid security, which does not meet specifications.
HRA Minutes - 2/21/89
3. CONTINUED.
Second law bidder, Veit CtnstYvctlnn of Rogers, submitted a
5 percent bid bond for their $6,969.13 bid.
Chairperson ]arson asked to see a copy of the specifications
and bids for demolition to verify the clarity of the bid
security request. The HRA agreed the specifications and bids
clearly stated the request of a bid bond, certified check,
or cash equivalent. Rick Wolfsteller informed the HRA that
the HRA could be open to a law suit by the second low bidder
if awarding of the bid didn't follow specification and bid
requirements. Ben Smith made a motion for the HRA to award
the demolition bid to the second lowest bidder, Veit Construction
of Rogers. Minnesota for $6,969.13 inclusive of a 5 percent
bid bond. It is with deep regret that the HRA couldn't award
the bid to a local firm, Schluender Construction, for the low bid
of $5,200 and the HRA encourages Schluender Construction to
submit future bide with the requested bid security. The motion
was seconded by Tom St. Hilaire and with no further discussion
the motion passed 6-0. Notify Schluender of HRA's regrets.
b. ADJOURNMENT.
The special HRA meeting adjourned at 8:15 PM.
011ie Noropchak, HRA Executive Secretary
Business Development SaMau Inc.
•** M EMO R A N D U M "'•
TO: O. Roropchak, J. O'Neil and R. Wolfsteller
City of Monticello
FROM: P. Pelstring, Business Development Services, Inc.
DATE: February 21, 1989
RE: TIF POLICIES AND PROCEDURES
i have prepared a draft of HRA policies and procedures for Tax
Increment Financing assistance as discussed by the Authority at
their February meeting.
These policies are organised as followsi (1) Program Purpose,
(2) Policy Considerations --for HRA project evaluation, (3) Policy
Guidelines --recommended structure for TIF assistance, and (4)
Internal Procedures --specifies standard TIF process.
The Policy Considerations are subjective criteria which the HRA
can utilize for the evaluation of projects. These criteria are
purposely more philosophical in nature, to provide for the
appropriate review and discussion of the project.
The Policy Guidelines address the typical structures which will
be utilised to fund each type of project. These guidelines
provide flexibility for the overall structure of the project.
Most importantly, they draw a distinction between providing
"subsidized" assistance for manufacturing verses other types of
commercial or housing projects. Generally, TIP assistance
would be structured as a loan, unless the write down simply
brings the project down to competitive market terms. We should
review the consequences of this policy in light of your
continuing discussions with developers.
The internal procedures do presume a continued relationship with
our firm and the Monticello Housing and Redevelopment Authority.
This relationship would be consistent with the contractual
proposal presented at the earlier HRA meeting.
Please review this information and I will schedule a meeting to
discuss it further, prior to the next HRA meeting.
PWP/ld
Enclosures
9090 S YMBA0ON WM • AM M • MM(APOLK MN SSW • FWM 619nM64151
HOUSING AND REDEVELOPMENT AUTHORITY
11 City of Monticello
TAX INCREMENT FINANCING POLICY
Program Purpose: The Monticello Housing and Redevelopment
Authority will utilize Tax Increment Financing to support the
community's long-term economic and housing goals.
Policy Considerations: The HRA will analyze and evaluate Tax
Increment Pinancing proposals based upon the following policy
considerations. Each project shall be measured against these
considerations and the project's value shall be determined, based
upon meeting these considerations.
(1) The project shall be consistent with the City's
Comprehens ive Plan.
(2) The project shall demonstrate long-term economic and/or
housing benefits to the community.
(3) The project shall create and/or retain employment for
Monticello residents.
(6) The project shall increase moderate priced housing
options for area residents.
(5) The project shall facilitate the redevelopment or
elimination of 'substandard• or "blighted" areas as
determined by the HRA.
(6) The project shall facilitate the -clean-up- of
environmentally unsound property.
(7) The project shall provide additional public funding
for public improvements including utilities and/or
park development which would not otherwise be available.
(8) The project shall be deemed to promote additional
desired "spin-off' development.
POLICY GUIDELINES
(1) Tax Increment Financing will be considered for use in
economic development, redevelopment and specialized
housing projects. The standard level of assistance for
projects shall be as followst
YY�o.y
A. Manufacturinq Protects - The HRA, ah , to the extent
of the availabl ricrement, compensate manufacturing
projects for the cost of their land acquisition. If
additional funding is feasible for site development
costs, the funds shall be lent to the manufacturer over
a ten-year time period at an intte`rresL��-trate of -'percent.
X. � %W1,W7
B. office/Commercial Proiects - The HRA shah "r vide
assistance to the extent of the availabl Increment, to
compensate the business/developer to 'equglize- the pro-
ject to accepted area market standards. Additional
available TIF funds shall be provided to the company/
developer as a 10 -year, 8 percent loan.
C. Housinq Proiects - The HRA shall provide assistance
to encourage the development of housin projects which
are consistent to the HRA's objectives. TIF compensation,
to the extent available, shall be utilized to compensate
the developer to "equalize* the project to accepted
.�, market standards. Additional assistance may be
.. T-. available to a developerR so long as the benefits of the
assistance are passed through in Xeduced rents and/or
purchase osts. nAa� \ "f v;
G.— a. a-
U lY�.rL�•
(2) The meriwwr term of the Tax Increment Financing bond issues
shall be amortized based on receipt of thirteen (13) years
full increment with the district having a ma*ioum length of
fifteen (15) years. Economic Development and Soils
Corrections Districts shall conform to statutory
requirements.
(3) Tax Increment Financing projects in the City of Monticello
must be accompanied by a signed development agreement with
the developer which includes an assessment agreement setting
forth a minimum market value.
(4) Tax Increment Financing may be used fora
A. Land acquisition and write down.
S. Site preparation and improvement.
C. Public improvements.
D. Demolition.
E. Bonding costs.
F. Capitalized interest.
G. Legal, administration and engineering.
(S) The Monticello Planning Commission shall review each Tax
Increment Financing proposal to determine that the
established and/or modified development district is in
conformance with the City's Comprehensive Plan and to review
the specific Tax increment Financing District to review the
appropriate zoning.
HOUSING AND REDEVELOPMENT AUTHORITY
i
City of Monticello
INTERNAL TAX INCREMENT FINANCING PROCEDURES
(1) Applicant submits the completed application for Tax
Increment Financing and the application fee.
(2) City staff sends a copy of the application to Business
Development Services, Inc.
(3) Business Development Services reviews application and
advises City staff whether project is financially feasible,
makes a preliminary analysis of expected yearly tax
increment and reviews proposal to assure its consistency
with the City's Tax Increment Financing policy.
(4) City staff determines that proposal should proceed and
notifies developer.
(5) Business Development Services prepares TIF plan and sends a
copy to City staff and Holmes a Graven and coordinates
distribution to county and school boards.
(6) Business Development Services prepares Tax Increment
Financing plan and all necessary notices, resolutions and
certificates utilising information supplied by Springsted
Incorporated and Holmes a Graven.
(7) Business Development Services publishes notice and sends
notice to county and school boards.
(B) Representatives from Business Development Services attend
planning commission meeting and public hearing as required.
(9) City staff compiles executed documents and supplies
Business Development Services, Springsted Incorporated and
the City with follow up documentation.
(10) Business Development Services files adopted Tax Increment
Financing plan with the State.
(11) City staff conducts annual audit and prepares
.certification documents to comply with State reporting
requirements.
y
C' -TY OF MONIICELLO
TAX 11=EMENT FINANCE APPLICAT'-ON
Name of Company
Company Address
Company Mailing Accress
Company Telephone Number
Owner's Names)
owner's Address
Owner's Telephone Numcer
Proposed Numbe: of New Jobs
Total square footage of proposea builoing
Square footage of office area
Square footage of manufacturing area
Square footage of cold storage area
Describe t•1pe of structure (masonry, concrete, metal)
Acreage of land
Requirements
A. Initial Fee: For an estimated project cost less than $50,000, the
initial fee is Si of the project cost.
For an estimated project cost of $50,000 and over, the
maximum initial fee is $2,500.
The initial fee is due after approval of the financial
statements and business plans.
The initial fee will be refunded at the time the
Development Agreement is executed and the land acquired.
No initial fee will be refunded if the Development
Agreement is not executed and the land not acquired.
B. Company Financial Statements
1. Balance Sheets (three years prior)
2. Profit and Loss Statements (three years prior)
3. Either Projections (three years) or Business Plana
C. Preliminary Building and Site Plans (Gary Anderson, Building/Zoning
Administrator). For BILA review, prior to setting a public hearing date on
the sale of public lands.
D. Final Building and Site Plans. Prior to Public Hearing on TIP Plan.
E. Proposed Development Time Table.
F. Statement of Financial Commitment and Arrangements to date.
G. Execution of Development Agreement and Acquisition of Land.
The use of TIP must be approved by the Monticello Housing and Redevelopment
Authority, the Planning Commission, and the City Council.
AutnoCIZed Slgeature
Date